No decision yet for petrol ceiling price

by AFIQ AZIZ / pic by RAZAK GHAZALI

THE ceiling price for RON95 and diesel, which is currently fixed at RM2.08 per litre and RM2.18 per litre respectively, is expected to be adjusted according to the rate that has seen a steady increase in the past three months.

Domestic Trade and Consumer Affairs Minister Datuk Alexander Nanta Linggi (picture) said while the government will continue to monitor the situation, there is no rush to decide on the new rate, as the price is still not considered high enough for the government to mitigate.

This week, the fuel price for RON95 and diesel was set at RM1.93 and RM2.11 respectively.

“We are now thoroughly studying and looking at the rate (either to maintain or change).

“We hope that after taking into account all aspects and impacts to the stakeholders, the rate will not burden the people,” Nanta Linggi told a press conference after attending the compliance monitoring of maximum price scheme for Chinese New Year in Kuala Lumpur yesterday.

In a report by The Malaysian Reserve last week, Petrol Dealers Association of Malaysia (PDAM) is seeking clarification with the ministry on the new ceiling price for the fuel.

PDAM president Datuk Khairul Annuar Abdul Aziz said without a ceiling price, petrol station operators’ cashflow will remain tight as they will have to buy fuel at higher prices, making the cost of holding stocks more expensive.

He said station owners have yet to recover their losses from the enforcement of the first round of Movement Control Order (MCO) in March last year.

RON95 was sold at RM2.08 in March 2020, but the price had been volatile until November.

RON95 and diesel were retailed at RM1.62 and RM1.74 respectively, before steadily climbing to RM1.93 to RM2.11 this week, in tandem with the world’s Brent-crude futures.

The benchmark in energy markets has risen more than 50% since the end of October and is approaching US$60 (RM244.20) a barrel for the first time since Covid-19 began to erode oil demand in early 2020.

However, with the ceiling price in place, the amount of government’s subsidy would also be increased.

“We monitor this all the time, but it is yet for us to determine the new ceiling price because the current rate is still low,” Nanta Linggi reiterated. The ceiling rate was enforced by the previous Pakatan Harapan administration to control the price of the basic commodity.

On issues pertaining to price hike in essential items in other retail markets, Nanta Linggi said the ministry has not received any complaint.

“Food items are also sufficient in the market, so there should be no worry,” he said.

Nanta Linggi said the ministry and the National Security Council are also looking at allowing more retail sectors to reopen during the current MCO 2.0 period.

Among the retail sectors that have not received the greenlight to operate during MCO 2.0 include clothing businesses and sports centres.

Nanta Linggi said the retail sector has a much lesser impact towards the spread of the Covid-19 disease compared to others, like manufacturing and construction.

“The continuity of the business is important to ensure people are employed. But we need to ensure the standard operating procedures will be strictly followed. There will be an announcement soon on this,” he said.


Read our previous report here 

Petrol dealers want more clarification