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Tag: quota

  • Malaysia Slashes Subsidized Fuel Quota Amidst Escalating Global Oil Prices

    Malaysia Slashes Subsidized Fuel Quota Amidst Escalating Global Oil Prices

    In response to the recent spike in global oil prices, the Malaysian government has made the decision to decrease the monthly quota for subsidized RON95 fuel from 300 liters to 200 liters, with the policy effective from April.

    Reasons for the Reduction

    This reduction has been deemed necessary due to increases in the government’s subsidy bill. Malaysian Prime Minister Anwar Ibrahim has warned that, if global crude prices continue to remain above $110 per barrel, the subsidy bill could escalate to RM24 billion (US$6 billion) this year.

    Subsidized by the government, RON95 fuel is sold at a fixed price of RM1.99 per liter in Malaysia to ensure affordability for lower-income groups. Currently, eligible individuals can purchase up to 300 liters per month, after which they are charged at market rates. These rates have recently seen an increase from RM3.27 to RM3.87 per liter for the week of March 26 to April 1.

    The unsubsidized price of this fuel has also seen two increases since March 11, resulting in a combined increase of 45%. The latest weekly adjustment has also seen an increase in the pump price for RON97 to RM5.15 per liter, marking an overall increase of 58.46% since March 11, while diesel has seen an increase to RM5.52 per liter, up 76.92% over the same period.

    Global Oil Supply Disruptions

    This decision comes at a time when the global oil supply has been disrupted due to conflicts in the Middle East, specifically in the Strait of Hormuz, a crucial route that typically carries around 20% of the world’s oil flows.

    Brent crude has experienced a drop to $94.49 per barrel after peaking at nearly $120 earlier this month. However, it still remains more than 33% higher than before the conflict began in late February. Despite being an oil producer, Malaysia isn’t exempt from these shifts in the oil market, as it imports a significant proportion of its oil, nearly half of which comes via the affected route.

    In a recent social media post, Anwar noted that Malaysia exported approximately $5.5 billion in crude oil last year but imported nearly $12.6 billion. Furthermore, the country’s monthly subsidy bill for petrol and diesel has seen a significant surge from RM700 million to RM4 billion.

    Possible Implications

    While higher global prices may increase government income and benefit the national oil firm Petroliam Nasional, sustained volatility could lead to inflationary pressures and add to the fiscal burden of fuel subsidies. Announcing the weekly price adjustments, Malaysia’s Ministry of Finance declared the government’s ongoing commitment to protecting the public from rising costs and maintaining the subsidized RON95 prices at RM1.99 per liter.

    Analysts have suggested that tightening the subsidy quota could be a practical option to alleviate pressure on government funds, along with another possibility of increasing the subsidized fuel price to RM2.05 per liter.

    Questions & Answers

    What are some of the reasons for the reduction in subsidized RON95 fuel?
    This reduction has been deemed necessary due to increases in the government’s subsidy bill. If global crude prices continue to remain above $110 per barrel, the subsidy bill could escalate to RM24 billion (US$6 billion) this year.

    How has the global oil supply been disrupted?
    The global oil supply has been disrupted due to conflicts in the Middle East, specifically in the Strait of Hormuz, a crucial route that typically carries around 20% of the world’s oil flows.

    What could be some potential implications of this situation?
    While higher global prices may increase government income and benefit the national oil firm Petroliam Nasional, sustained volatility could lead to inflationary pressures and add to the fiscal burden of fuel subsidies.

  • EU Sets Women Boardroom Quota at 40 Percent

    EU Sets Women Boardroom Quota at 40 Percent

    After ten years the EU has reached a landmark decision to achieve corporate gender equality. The move will put pressure on Swiss companies both in the EU and at home.

    The EU is introducing a legally binding 40 percent quota for women in non-executive positions and a 33 percent quota for women in executive roles of companies operating in the European Union from mid-2026, it said in a press statement late Tuesday.

    Currently, only a third of boardroom members in the EU are women and the number of female senior managers is lower, it said. The new directive aims to help companies listed on EU stock exchanges accelerate their progress in reaching gender equality.

    While Swiss companies listed in the EU will have to comply with the new European law, companies listed in Switzerland are being put «indirectly» under pressure to follow suit by this decision, Fabienne Meier partner at executive search firm Knight Gianella & Partner, said.

    Last year Swiss law determined a 30 percent quota for women on the board of directors of Swiss listed companies within five years and a 20 percent quota for women in executive management positions within ten years.

    For Meier, the boardroom targets are realistic, but the pool of female talent for the executive level is too small, as it was not nurtured enough in the past. Some sectors will struggle to close the gender gap as they look for top female executives with (rare) technical profiles, she said.

    The Commission first proposed gender balance on company boards in November 2012, but it has taken ten years for all decision-makers to reach an agreement on the matter with some member states previously opposing binding measures at the EU level.

    Although 60 percent of current university graduates are female, women are underrepresented in high-level positions and progress is very slow. Countries with national quotas have the highest share of women sitting as board members of listed companies, according to the statement.