No revoking of price ceiling for RON95, diesel

It is only a change in mechanism for better effectiveness of enforcement at the ministry level, says minister


INSTEAD of revoking the price ceiling for fuel, the government has changed the mechanism in controlling the retail prices of fuel in order to enhance the effectiveness of enforcement at the ministry level.

Domestic Trade and Consumer Affairs Minister Datuk Alexander Nanta Linggi said as of Feb 29, 2020, his ministry has changed the mechanism of the control of retail prices of fuel through the Supply Control Directive under Regulation 12A of the Supply Control Regulations 1974 of the Supply Control Act 1961.

“The change of mechanism is intended to enhance enforcement and monitoring at the ministry level in the event of any violation of the directive under the Act,” he said in a statement yesterday.

He also emphasised that there are no changes in terms of setting the prices of petrol and diesel, as reported earlier yesterday.

“Retail pricing of petrol and diesel is determined through the Automatic Pricing Mechanism (APM) which is influenced by the global crude oil prices.

“In ensuring the interests of consumers, the Domestic Trade and Consumer Affairs Ministry is committed to ensuring that all oil companies and gas station operators comply with the prices set by the Ministry of Finance (MoF),” he added.

Nanta Linggi said taking into account the current trends in global crude oil prices, the government will continue to monitor the prices and act appropriately to ensure the welfare and wellbeing of the people.

Since March 30, 2017, the retail prices of petrol and diesel were set weekly and enforced by the ministry through the Price Control and Anti-Profiteering Order (Determination of Maximum Retail Price for Petrol and Diesel).

The purpose is to ensure that oil companies and petrol station operators do not exceed the prices set by MoF.

His statement came after reporters questioned him on the government’s move to revoke the price control order that sets a price ceiling for RON95 petrol and diesel.

“Don’t misunderstand it. We have not revoked the so-called price ceiling. It is the same,” he told reporters yesterday after a walkabout in MyTown Mall Cheras to monitor the implementation of the required subsector standard operating procedures set by the government recently.

Yesterday, a gazette published on June 3, 2020, was sighted whereby there were no longer a clause on the ceiling prices for petrol and diesel in a price control order.

The gazette was approved by the minister himself on April 10, 2020.

“The Price Control and Anti-Profiteering (Determination of Maximum Retail Price for Petrol and Diesel) (No 8) Order 2020 [P.U. (A) 64/2020] is revoked,” the gazette stated.

The previous gazette, dated Feb 21, 2020, still had a clause for ceiling prices.

Until Feb 21, the gazette were updated weekly, however that has no longer been the case since the Perikatan Nasional administration took over.

The price ceiling was introduced by the Pakatan Harapan coalition to restrict the maximum retail price for RON95 and diesel regardless of global oil price levels.

The cap was previously set at RM2.08 for RON95, RM2.38 for RON97 and RM2.18 for diesel. It would be the maximum consumers would have to pay, with the government covering the difference through subsidies.

For the week ending June 12, prices for RON95, RON97 and diesel are at RM1.48, RM1.78 and RM1.63 respectively.

Meanwhile, petrol dealers say they are unaware of the ministry‘s decision in revoking the price control order that set a price ceiling for RON95 petrol and diesel.

Petrol Dealers Association of Malaysia (PDAM) said its members only learned about this via media reports.

“We were just made aware,” said PDAM spokesperson said when contacted.

Under Budget 2020, the government allocated RM2 billion for the purpose of fuel subsidy, based on an average oil price of US$62 (RM263.50) per barrel for the year.