KUALA LUMPUR: CIMB Economics Research estimated the federal government's fuel-related subsidies could reach RM14 billion based on the current oil price of US$90 to US$100 per barrel.
It said on Tuesday, March 1 that if the oil price rises to US$130 to US$140 per barrel, the amount of subsidies could balloon to at least RM18 billion to RM20 billion.
Under the Budget 2011, the federal government earmarked 6.3% of the total operating expenditure (opex) or RM10.3bn as subsidies for LPG, diesel and petroleum, based on an average oil price of US$85 per barrel.
In 2008, subsidies for fuel and petroleum-related products amounted to RM17.6 billion or 11.4% of opex.
At 2pm, light crude oil was trading at US$97.44, up 47 cents.
CIMB Resarch said oil-related revenues (comprising petroleum income tax, petroleum duties, sales tax, petroleum royalty and Petroliam Nasional dividends) are estimated at RM59.4 billion or 35.8% of total revenue in 2011, based on an average oil price of US$85 per barrel.
'It is estimated that for every US$1 per barrel rise in crude oil prices, the Federal government's revenue will be boosted by an estimated RM300 million to RM400 million over two years.
'However, higher crude oil prices could raise the government's subsidy payments for fuel as well as petroleum products such as diesel and liquefied petroleum gas (LPG), thereby offsetting some of the increases in revenue,' it said.
It said on Tuesday, March 1 that if the oil price rises to US$130 to US$140 per barrel, the amount of subsidies could balloon to at least RM18 billion to RM20 billion.
Under the Budget 2011, the federal government earmarked 6.3% of the total operating expenditure (opex) or RM10.3bn as subsidies for LPG, diesel and petroleum, based on an average oil price of US$85 per barrel.
In 2008, subsidies for fuel and petroleum-related products amounted to RM17.6 billion or 11.4% of opex.
At 2pm, light crude oil was trading at US$97.44, up 47 cents.
CIMB Resarch said oil-related revenues (comprising petroleum income tax, petroleum duties, sales tax, petroleum royalty and Petroliam Nasional dividends) are estimated at RM59.4 billion or 35.8% of total revenue in 2011, based on an average oil price of US$85 per barrel.
'It is estimated that for every US$1 per barrel rise in crude oil prices, the Federal government's revenue will be boosted by an estimated RM300 million to RM400 million over two years.
'However, higher crude oil prices could raise the government's subsidy payments for fuel as well as petroleum products such as diesel and liquefied petroleum gas (LPG), thereby offsetting some of the increases in revenue,' it said.
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