PETROL station operators claim they could lose up to RM40 million following the dip in petrol pump prices.
Petroleum Dealers Association of Malaysia president Datuk Khairul Annuar Abdul Aziz said the drop in fuel prices by 14 sen per litre for diesel and 27 sen per litre for RON95 and RON97 petrol would result in RM30 million to RM40 million in petroleum retail losses, based on existing fuel stock.
“All operators will have to bear with it,” he said.
The government had decided to reinstate the Automatic Fuel Pricing mechanism to determine fuel prices on a weekly basis.
Finance Minister Lim Guan Eng confirmed the adoption of the former managed float system while announcing the new petrol rates, which will take effect from today until Jan 11.
“We are doing this to allow consumers to enjoy any drop in prices quickly, in line with the global trend of declining oil prices,” he said here yesterday.
The retail prices of RON95 and RON97 petrol and diesel have been reduced. RON95 will be sold at RM1.93 per litre (27 sen lower), RON97 at RM2.23 per litre (27 sen lower) and diesel at RM2.04 per litre (14 sen lower).
“The announcement of retail prices will be made every Friday and comes into effect from Saturday to Friday,” Lim said.
He said the decision was made in a cabinet meeting on Wednesday and took into account the views of all stakeholders, including concerns of the Petroleum Dealers Association of Malaysia.
“They met with Prime Minister Tun Dr Mahathir Mohamad and requested that their margin as operators be revised to add another 2.81 sen to make it 15 sen a litre for RON95 and an additional 3 sen per litre for diesel (to 10 sen).
“The last time this margin was reviewed was in 2008,” said Lim.
He said the government was committed to carrying out fuel price stabilisation policies to benefit Malaysians.
“This means when petroleum prices fall in the global market, the retail prices of petroleum products will also be lowered to allow consumers to enjoy the benefits of lowered fuel prices quickly. But when the prices of the global market go up, the retail price will be capped at RM2.20 for RON95 and RM2.18 for diesel per litre respectively.
“This new cap is an initiative of the federal government under Pakatan Harapan and has not been done before.
“This policy will be in place until the RON95 (targeted) petrol subsidies come into effect in the middle of the year before the retail price is floated in a managed way based on market prices.”
The Pakatan Harapan administration has maintained the price of RON95 at RM2.20 per litre since taking over the federal administration last May.
The last time the price of RON95 was changed was on March 22 last year under the weekly managed float system implemented by the Barisan Nasional administration.
The system has been in place since December 2014 following the withdrawal of government subsidies.
Under BN’s pricing system, there was no cap on retail prices of petrol and diesel, but they were frozen in the weeks leading up to the 14th General Election.
At that time, the price of crude oil was about US$69 (about RM285) per barrel. Currently, the price of crude oil is about US$52 per barrel.