Petrol and diesel price to drop tomorrow

PUTRAJAYA, Aug 22 - The petrol and diesel price will drop by between eight sen and 22 sen a litre tomorrow.

Prime Minister Datuk Seri Abdullah Ahmad Badawi announced today that the Cabinet had decided that the price of RON97 petrol be reduced by 15 sen to RM2.55 a litre from RM2.70, while RON92 would cost 22 sen less at RM2.40 a litre from RM2.62 a litre.

The retail price of diesel would drop by eight sen to RM2.50 a litre, he said in a statement.

The petrol price was determined by taking into account the actual price from Aug 1 to 21 and the 30 sen per litre subsidy borne by the government while the subsidy for diesel, based on the new price, was 50 sen a litre.

"The cabinet today decided to bring forward the enforcement date for adjustment of the new petrol price," he said.

Abdullah said the decision was made after taking into account the fall in the world fuel price in recent weeks and the steep rise in the inflation rate last month.

The Consumer Price Index (CPI) for last month, as announced today, rose by 8.5 per cent compared with July last year.

"It is the government's hope that the reduction in the petrol and diesel price will help ease the burden of consumers and reduce the inflationary pressure, especially on the low- and middle-income earners. The decision is also based on the current economic development," the prime minister said.

On Aug 1, the government announced that the petrol retail price till the end of the year would be adjusted on the first of every month, with the subsidy maintained at 30 sent per litre.

However, the prime minister said the adjustment formula would only be implemented if the retail price of petrol was less than RM2.70 per litre. otherwise the price would be capped at that.

On June 5, the government raised the petrol price by 78 sen or 41 per cent from RM1.92 to RM2.70 a litre and diesel by RM1 or 63 per cent from RM1.58 to RM2.58 a litre.

At that time the world oil price was US$125 a barrel and it continued to rise to hover at US$140 a barrel at one time but has been on a downward trend since early this month.

The price was around US$115 a barrel last week and US$121 a barrel yesterday.

With today's announcement, the drop in price of RON97 petrol was 5.5 per cent, RON92 (8.4 per cent) and diesel (3.1 per cent).

-TMI