The government has effectively formed a cartel with petroleum companies by not allowing the companies to freely set lower prices for fuel, a DAP lawmaker claims.

Petaling Jaya Utara MP Tony Pua said such a practice would be a means by which the government will protect petrol dealers from competition.

"If other essential goods such as vegetables and food, teh tarik and coffee, can see competition, why is such an important essential product, such as fuel, not allowed to compete?" Pua said at a press conference in the Parliament lobby today.

Domestic Trade, Cooperatives and Consumerism Minister Hamzah Zainuddin yesterday announced that the weekly ceiling petrol and diesel prices would be announced every Wednesday, starting March 29.

Hamzah said petrol companies that want to give discounts can write to his ministry.

Pua argued that only big petrol companies can afford to give discounts, and their applications to give fuel at a lower price would be objected to by the smaller companies.

He added that it would be nonsensical for the government to regulate petrol companies from wanting to sell fuel at a lower price.