KUALA LUMPUR: Malaysia will lower the price of diesel to 2.10 ringgit ($0.50) per litre nationwide from July after the current difference in prices between subsidised and unsubsidised diesel led to smuggling and revenue losses.
Diesel is currently sold at a subsidised price of 2.15 ringgit per litre in the eastern states of Sabah and Sarawak, compared with 4.37 ringgit in the Malaysian peninsular.
- The price gap had created room for revenue leakage and the smuggling of subsidised diesel, including across borders, the finance ministry said in a statement on Sunday.
- The ministry did not say how the government planned to finance the additional subsidy, with public coffers already under strain from rising fuel costs stemming from the war in Iran. Second Finance Minister Amir Hamzah Azizan is expected to announce further details on Monday, it said.
- Malaysia has been seeking alternative fuel sources as the Middle East conflict restricts global supplies.
- Separately on Saturday, national energy firm Petronas, or Petroliam Nasional, announced it had signed several new agreements in Turkmenistan, including collaborations with state companies Turkmennebit and Hazarnebit, to strengthen Petronas' presence in the Caspian Sea and expand its upstream portfolio.
- Prime Minister Anwar Ibrahim said the deals would allow Malaysia access to one of the largest gas reserves in the world, and potentially enable it to increase exports to partner countries such as China, Japan and South Korea, according to state news agency Bernama.
- Russia has also assured Malaysia of a long-term agreement for the supply of oil, gas and diesel for at least 20 years, Anwar said, without providing further details.
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