Guan Eng: What “Hidden Petrol Tax”?

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The government has not been taxing petrol, not profited from retail fuel prices.

Finance Minister Lim Guan Eng has dismissed talk of Putrajaya collecting “hidden” petrol tax for the last two months, saying RM4.8 million worth of petrol was subsidised last year.

Rebutting a statement by MCA president Wee Ka Siong, Lim said the Pakatan Harapan (PH) government had neither profited from retail petrol pump prices nor imposed sales tax on RON95 petrol or diesel.


“Allegations that the government has been taxing petrol are false and baseless,” he said in a statement today.

“The total petrol and diesel subsidies for the first 11 months of 2018 amounted to RM4,890 million. The latest official records show that in November 2018, the government paid RM4.1 million in RON95 petrol subsidy.

“Meanwhile, for diesel fuel that is heavily used not only for commercial and industrial sectors but also by the general public in Sabah and Sarawak, the government paid RM209.1 million subsidy in November”.

He said the figures for December were being compiled.

Yesterday, Wee expressed doubt that the scrapping of motorcycle tolls on Penang’s two bridges and at the Malaysia-Singapore Second Link in Johor would be permanent as announced.

He claimed this was because Putrajaya would “probably” need to pay compensation of RM20 million yearly to the toll concessionaires to ensure the abolition was permanent.

“This RM20 million is the same as PH’s collection of petrol tax every day quietly by not reducing petrol prices by 30 sen per litre over the past two months. Can Guan Eng explain this?” Wee asked.

Lim provided a breakdown of RON95 (RM2,737.9 million) and diesel subsidies (RM2,152.3 million by the government from January to November last year. Altogether, this amounted to RM4,890.2 million.

“This government is dedicated to transparency,” he said.

“If and when APM (automatic pricing mechanism) prices drop further, the government will adjust the pricing downwards so that Malaysians will benefit from cheaper fuel prices.

“The government is implementing a floating mechanism in January where pump prices will fall on a weekly basis if APM prices decrease further.”

Lim said if APM prices went up, then the retail prices would be stabilised at the current fixed levels at RM2.20 per litre for RON95 and RM2.18 per litre for diesel.

“Once Putrajaya rolls out its targeted petrol subsidy programme before the end of this year, petrol and diesel will be floated freely based on market prices,” he said.

Fuel prices for RON95 and diesel have remained unchanged since June 7 last year.

The government said last week RON95 petrol and diesel prices were expected to be lower this month in view of the downward trend in global oil prices.

But in the event global oil prices went up, fuel prices locally would be raised to a maximum of RM2.20 for RON95 petrol and RM2.18 for diesel.

Lim added that a targeted subsidy system would be introduced this year.

Meanwhile, Domestic Trade and Consumer Affairs Minister Datuk Seri Saifuddin Nasution Ismail said today that the Cabinet has reached a decision on the mechanism on fuel prices and that it will be announced on Friday (Jan 4).