Shahrir: Gov't open to fortnightly fuel price review

Domestic Trade and Consumers Affairs Minister Shahrir Abdul Samad today said the government would consider a proposal to review fuel prices in the country on a fortnightly basis.

However, he said the government would not immediately implement the fortnightly review, but instead continue with its current monthly evaluation.

"We will see how it (the monthly review) goes first and if we can settle the technical problems and we are comfortable, can go for a fortnightly review," Shahrir said after attending the 12th Malaysian Consumer and Family Economics Association conference in Bangi.

He further explained that the monthly review was the first mechanism introduced to monitor fuel prices in the country.

"For the time being, we will go ahead with that (monthly review). But the government has assured the public that fuel prices will not exceed RM2.70 per litre," Shahrir said.

Yesterday, Gerakan's acting president Dr Koh Tsu Koon proposed that the adjustment of fuel prices in the country be done fortnightly instead of a monthly review to keep up with fluctuating global fuel prices.

The government had announced on Aug 2 that fuel prices would be reviewed once a month beginning Sept 1, based on the average global market price and after taking into consideration the fixed subsidy of RM0.30 per litre.

'It is not as easy as it looks'

Shahrir said that the government would reduce fuel prices according to the current price of crude oil which has gone down to US$115 per barrel (RM383.20) - the lowest in three months.

However, he said reducing the price of fuel would not be an easy task as there are many issues that had to be taken into consideration.

"When the price (of crude oil) goes down, we will reduce the fuel price but it is not as easy as it looks because there are many issues we must settle first," he said.

One of the issues is petrol station operators fixing fuel prices based on the absolute-pricing mechanism (APM) system to maximise profit margins instead of depending on prices determined by fluctuating markets.