The price of petrol is expected to increase despite the Domestic Trade and Consumer Affairs Ministry claiming otherwise last week.

According to a Caltex petrol station operator in Kuala Lumpur, Andrew John Maengkom, Caltex had told its distributors throughout the country to prepare the extra cash to buy the fuel.

"We were told by Caltex that the fuel price hike is likely, probably before or after the announcement of Budget 2003 next week," he said when met recently.

The budget will be presented by Prime Minister Dr Mahathir Mohamad in Parliament on Sept 21.

"We were told that this time, the hike for petrol will be around three to eight sen per litre," said Andrew who operates a petrol station in Bandar Sri Damansara.

"Furthermore, the hike this time is rather expected due to the (possible) United States attack on Iraq, which would cut the crude oil supply short," he explained.

Meanwhile, the Petrol Dealers Association of Malaysia vice-president Abu Samah Bachik said they have yet to receive anything in black and white from the ministry.

However, he added, that there are strong rumours circulating among the dealers that a hike is imminent.

"In the past, we were never informed about the hikes, and the news always come as a surprise," he said.

Higher cost

Abu Samah explained that the increase in petrol or diesel does not benefit petrol station operators as the government allows them to make only an eight sen profit for every litre sold.

"Thus, petrol station operators will have to bear higher costs, probably RM3,000 to RM5,000 more every one or two days to refill their stock (depending on the turnover)," he said.

He added that at the current price, a petrol station owner has to fork out about RM32,000 a day in cash to buy the fuel.

"If our commission does not increase, then the price hike will only further shrink our profit margin," he said.

In view of these, Abu Samah urged the government not to increase the fuel price as this will burden consumers and also lead to inflation.

The petrol price in Malaysia has been increased three times since 2001, after the price was fixed at RM1.10 per litre for more than a decade.

The current price is at RM1.32 sen per litre meaning that in less than two years, the price has increased by 22 sen or 20 percent.

According to a recent foreign newspaper report, industry sources estimate that the next price hike in Malaysia will be between three and eight sen.

Early last month, Prime Minister Dr Mahathir Mohamad hinted that the petrol price will be further increased as the government is unable to bear the RM4 billion annual subsidy.

Despite being an oil producing nation, the premier said Malaysia is only capable of exporting 100,000 barrels of crude oil a day out of the total production of 650,000 barrels due to high local demand.

However, Mahathir assured, that the increment will be minimal in order not to burden consumers.