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Malaysia hikes 2008 oil and gas subsidy estimate

Malaysia has raised its 2008 oil and gas subsidy expenditure to 45 billion ringgit (US$13.91 billion) from an earlier forecast of 35 billion ringgit (US$10.82 billion), as oil prices continue to touch fresh highs. “The [new] subsidies are based on global crude prices hovering between US$100/barrel [and] US$120/barrel,” Mohamed Yakcop, second finance minister, was cited as saying by the official Bernama news agency. The new subsidy estimate includes 18 billion ringgit for gasoline, gasoil and LPG, 7 billion ringgit (US$2.16 billion) in tax relief and 20 billion ringgit (US$5.56 billion) for Petronas’ gas subsidy, Yakcop said at a media conference in Kuala Lumpur on May 7. Yakcop said there was no cap on the subsidy amount. However, he did say that the government was looking at ways to restructure the whole subsidy scheme. (May 9, 2008)