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Gov't maintains fuel prices despite regional price increase

The government has announced that fuel prices will be maintained for the second consecutive week, despite increasing regional fuel prices.

The Domestic Trade, Cooperatives and Consumerism Ministry announced today that RON95, RON97, and diesel will retail at March 22 prices – at RM2.20, RM2.47, and RM2.18 per litre respectively.

The weekly fuel price system was implemented on March 30 last year, and is calculated based on regional benchmark prices provided by Means of Platts Singapore (Mops).

Under the government’s Automatic Pricing Mechanism (APM), the final retail price accounts for the MYR-USD exchange rate, refineries’ sale prices, operating expenditure, and profit margin for oil companies and petrol dealers, in addition to the Mops benchmark.

According to Mops data provided by the Australian Institute of Petroleum’s (AIP) weekly price reports, however, the benchmark for RON95 has been increasing steadily over the past few weeks.

 

The weekly average Mops RON95 price for the week ending March 16 was A$0.603 (RM1.85), which increased to A$0.640 (RM1.93) by the following week, and increased again to A$0.658 (RM1.96) last week.

The trend is similar for Mops’ benchmark for gasoil prices, which the AIP quotes as reference for diesel prices in the Asia-Pacific region.

The weekly average Mops gasoil price for the week ending March 16 was A$0.617 (RM1.90), which increased to A$0.651 (RM1.97) by the following week, and increased again to A$0.672 (RM2.00) last week.

The reason for the discrepancy in price movements is unclear, but occurs amid speculation that Parliament will be dissolved on Friday, paving the way for the 14th general election.

Fuel prices are among the hot button issues in the coming election, with Pakatan Harapan pledging to offer targeted fuel subsidies if it takes over the federal government.

The government discontinued fuel subsidies at retail pumps since 2014, and placed fuel prices on a managed float system that is updated weekly.

According to a Reuters report on March 29, global oil prices have been increasing as the Organization of the Petroleum Exporting Countries (Opec) and other oil suppliers are bent on producing crude oil at the reduced rate for the rest of 2018.

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