Weekly fuel price float put on hold amid protest

KUALA LUMPUR (Dec 31): The government has decided to delay the implementation of the controversial weekly fuel price float mechanism amid opposition from the Petroleum Dealers Association of Malaysia (PDAM).

Fuel prices, including for RON 95 petrol, was supposed to be fixed on a weekly basis starting tomorrow (Jan 1).

However, Finance Minister Lim Guan Eng said today the government will first study PDAM's request to raise their members' sales commission for fuel to cover the anticipated higher cost of operation.

The association is seeking to raise the commission to 15 sen per litre for both petrol and diesel, from the current commission of 12 sen per litre for petrol and seven sen per litre for diesel.

"The prime minister will meet with PDAM soonest possible," said Guan Eng in a statement.

He added that as such, retail petrol prices will remain the same for now at RM2.50 per litre for RON97, RM2.20 per litre for RON95 and RM2.18 per litre for diesel.

"A new retail price for petrol will be made before the end of the first week of 2019," he said.

On Dec 24, Guan Eng announced that a weekly float system will be used to determine fuel price for RON95 from Jan 1 onwards due to the falling prices of crude oil.

He said setting retail prices of petroleum products on a weekly basis will enable consumers to enjoy rapid price changes, in line with petroleum price changes in world markets.

As such, retail prices of petroleum products in Malaysia are expected to drop from Jan 1, 2019, according to him. The finance minister added that if the downtrend in world crude oil prices continues, retail fuel prices in the country will be lowered every week.

However, PDAM president Datuk Khairul Annuar Abdul Aziz told a press conference last Friday that dealers had suffered huge losses when there were changes in the price mechanism, RM61 million in December 2014 and RM30 million when the monthly, then weekly floats were introduced, resulting in large disparities in fuel prices. — theedgemarkets.com

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