Local fuel prices at the petrol pump are not solely dependant on global crude oil prices, Parliament was told today.

Domestic Trade and Consumer Affairs Minister Shahrir Abdul Samad in his winding up-speech for his ministry’s 2009 Supply Bill said many factors contributed to the final price of fuel.

petrol price hike panic 010705 shell station He said this in response to Dzulkefly Ahmad (PAS-Kuala Selangor) who asked why the government did not fix the price of fuel based on global crude oil prices which were currently hovering around US$55 per barrel - the lowest since June.

The PAS member of parliament said since the cost of crude oil per barrel was at an all time low, the government should lower prices to RM1.72 or RM1.64 for US$70 and US$60 per barrel respectively, instead of the current price of RM2 per litre.

Shahrir rebutted, saying the retail price of fuel at the pump cannot solely be based on global crude oil prices as other processes were involved in turning crude oil into fuel fit for vehicles.

‘We are not a communist government’

The minister also stressed that the government did not have the power to determine the prices of non-controlled items, even though their prices have soared since fuel prices were raised drastically in June.

In response to Mohamad Aziz (BN-Sri Gading), Shahrir said the government has no power to set the price of any item in the market.

"We are not a communist government to do such a thing and we would not want that to happen. What we want is an open and controlled competitive business environment," said the minister, who is also Johor Baru MP.

He added that the setting of prices fell under the purview of enforcement bodies like those who issued licences to traders.

"For instance, the enforcers should urge traders to reduce the prices of goods in order to get the licenses," said Shahrir.