Domestic Trade, Cooperative and Consumerism Minister Hasan Malek announced recently announced that the formula to calculate Ron 95 and Diesel prices will be revealed to the public soon. The ministry is currently seeking approval from the Ministry of Finance for the simplified version of the formula to be made public on the ministry website. The calculation of the fuel price is complex however it would be better for public to understand it.
Currently Malaysian Fuel price is calculated based on APM (Automatic pricing mechanism). The calculation method has been in place since early 1980s and is being used to stabilise fuel prices in Malaysia. The ministry has also added that the calculation for Ron 95 and diesel will be slightly different as fuel subsidy for Ron 95 and Diesel has been removed. Certain quarters have also questioned whether sales tax was imposed to the Ron 95 fule.
On 1st of December, Malaysian Government has effectively removed all fuel subsidy on Ron 95 and Diesel fuel in Malaysia .The recent Diesel price increment has sparked questions as the Global Crude Oil price continues to fall. While the prices on Ron 95 has fallen, many consumer has opted for Ron 95 instead as the price different between these two fuel are not hight. This has caused major Ron 97 petrol shortage on all the pump across Malaysia. The government has reiterate and increased the supply of Ron 97 fuel to address this issue.
The prices of Ron 95 and Ron 97 will be going down effectively 12:00 am 1st of December 2014. Ron 95 will be going down four cents while Ron 97 will be going down nine cents.The new Ron 95 will be priced at RM 2.26 per litre while Ron 97 will be priced at RM 2.45 per litre. Prices of diesel however will be going up three cents to RM 2.23 per litre.
Domestic Trade, Cooperative and Consumerism Minister Hasan Malek announced that the price will be valid as of December 2014. There will also be a monthly announcement on new fuel prices as Malaysians will be adjusted to new petrol floating prices as of December 2014 where all fuel subsidies are removed. With the new floating mechanism, fuel prices are bound to rise and fall depending on global crude oil prices. The system will be based on the Ron 97 floating mechanism where subsidy for the fuel was removed as early as 2010. Foreign exchange rate especially conversion between Ringgit and US Dollars will also be taken into account and this will also effect the fuel prices in Malaysia.
Minister Hasan Malek has also urged all petrol stations and oil company to follow the latest retail price set by the ministry. Actions can be taken by the Government to whoever that failed to do so under the Supply Control Act 1961. The Government has previously announced on November that fuel subsidy in Malaysia will be removed.
Globally, the fuel price has dropped significantly since a few months ago. Global crude oil has dropped to 66 USD per barrel which is one of the lowest price in 4 years time when OPEC decided to maintains production target.