KUALA LUMPUR (dpa) – Malaysia cut subsidies on fuel Thursday as part of the government’s efforts to reduce the fiscal deficit. Vehicle owners will pay 20 sen (6 cents) more for every litre of petrol and diesel, the Domestic Trade and Consumer Affairs Ministry said.
“This decision is in line with the government’s subsidy rationalisation policy to ensure the country’s finance remains strong,” the ministry said in a statement a few hours before the price was raised.
The office said the cutting of subsidies was aimed to further reduce the country’s fiscal deficit in 2014 to 3.5 per cent of the gross national product and 3 per cent in 2015.
Earlier this year, the government also increased its tariff on electricity by at least 15 per cent as part of efforts to rein in the budget deficit.
A new consumption tax will also be implemented in 2015.
The government embarked on reducing the budget deficit in September last year when it made the first 20-sen cut on fuel subsidies and abolished the subsidy on sugar.