The government says that the new weekly retail price mechanism for petroleum products will not only benefit the consumer but also petrol station operators. In a statement announcing the retail prices of fuel for the first week of January, finance minister Lim Guan Eng said that the new pricing structure takes into account the additional commission or gas station operator margin for dealers, which was approved by the cabinet earlier this week.
“The readjustment of the retail price of petroleum products has taken into account the views of all parties involved, including that of the Petroleum Dealers Association of Malaysia (PDAM), which applied for a review of the petrol station operator margin rate components under the Automatic Pricing Mechanism (APM) formula that is used to set retail prices for petroleum products,” he said in the statement.
Lim said the government has agreed that the petrol station operator margin rate be adjusted by an additional 2.81 sen to 15 sen per litre for petrol products and an additional three sen to 10 sen per litre for diesel products over the current rates. He said the last time the margin was revised was in 2008.
Consumers, meanwhile, will benefit from the weekly price format by enjoying any price changes faster in line with any downturn in petroleum prices in the world market.
However, the government reiterated that it will protect consumers from the effects of potential price increases by capping the price of RON 95 petrol at RM2.20 per litre and Euro 2M diesel at RM2.18 per litre even if crude market prices rise and push the pump price up beyond that level. This will remain until the implementation of targeted fuel subsidies announced during the tabling of Budget 2019.
The retail price of petroleum products will be readjusted on a weekly basis according to the controlled float method under the Automatic Pricing Mechanism (APM) formula. Fuel prices are set to be announced every Friday, and will be effective from Saturday until the next Friday.
For the period from January 5 to January 11, the retail price for RON 95 petrol will be lowered to RM1.93 per litre (down 27 sen from RM2.20 previously), while RON 97 petrol will be priced at RM2.23 per litre (down 27 sen from RM2.50). Euro 2M diesel will be priced at RM2.04 per litre (down 14 sen from RM2.18).