PUTRAJAYA: The Domestic Trade and Consumer Affairs Ministry (KPDNHEP) will make sure that the price of RON95 for consumers who do not enjoy the targeted subsidy will not increase with a big margin.
Its minister Datuk Seri Saifuddin Nasution Ismail said even though price of fuel will float based on world crude oil price, any increase with a big margin will give a direct impact on the Consumer Price Index (CPI) and would contribute to an increase in inflation.
“Let us assume on the first day of implementation, the price difference is about 30 sen. We don’t want that to happen.
“If the price of petrol has to be raised 30 sen, it has be done gradually over a period of time, for example, six to eight months,” he said today, after attending the ministry’s monthly assembly.
He said the ministry had also obtained guidelines from the Statistics Department which had done a simulation on the impact of fuel price increase to the CPI.
When asked if fuel price adjustments will be done weekly or monthly, Saifuddin said that was still being discussed with the Finance Ministry.
“It was decided before this that the adjustments will be done weekly. We have received many responses from suppliers, fuel companies and the public.
“Therefore, we have to study this comprehensively to determine the best format,” he said.
He also said today was the last day for the open tender to develop the targeted fuel subsidy system and the Finance Ministry was expected to announce the companies soon.
“I was made to understand there were 156 companies which had submitted their tender and the Finance Ministry would announce the company which was selected. The KPDNHEP is ready to work with the company,” he added.
The targeted fuel subsidy for RON95 is expected to be implemented in the second quarter of 2019.