The price of petrol will gradually increased starting this year

In the past few days, it was reported that government will reducing subsidy gradually starting from this year.

According to Malaysiakini, the government could hike petrol prices by an initial 15 sen per litre from their current price at some stage this year under plans presented by a body advising the government on how to cut subsidies.

The benchmark RON 95 grade currently costs RM1.80 per litre.The proposals were made in a public presentation on today to win over voters to accepting higher prices as Malaysia seeks to reduce its budget deficit which stood at a 20-year high of 7 percent of gross domestic product in 2009.

Under the proposals presented by the advisory body, the price of petrol would be hiked some time this year followed by two price hikes totalling 20 sen per litre in 2011 and two more of 20 sen per litre in 2012.

In 2013-2015, the price hikes would slow and by the end of 2015, the price of RON95 would stand at RM2.60 per litre, according to the plans that have yet to be approved by the government.

The forecasts were based on a crude oil price forecast of US$73.06 per barrel for 2011 and US$79.41-US$94.52 for 2013-2015.

World Oil Demand Stood at 85.21 million mbpd in 2010

The Organisation of the Petroleum Exporting Countries (OPEC) maintains unchanged its forecast on world oil demand for 2010 at 85.21 million barrels per day (mbpd), Algerian Press Service (APS) reported.

It is an increase of 0.9 million mbp in comparison with 2009. According to April's monthly report released on Wednesday here, OPEC said the oil demand remains prudent on the pace of world economic recovery.

"In 2010, world oil consumption should to increase by 0.9 million barrels per day, in conformity with our previous forecasts," oil cartel experts said.

However, the experts added that "the economic activities in the U.S. are still representing the point of interrogation for the progress of world demand"

Oil Prices Continues to Rise

Oil prices climbed toward US$86 dollars a barrel in Asia Trade on Monday, reflecting optimism in a global economic recovery.



New York's light sweet crude for delivery in May was up 77 cents to US$85.64 a barrel. New York crude briefly traded above US$85 last week, its highest level since October 2008, report news agencies in Singapore.

Brent North Sea crude for May rose 59 cents to US$84.60 a barrel.