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 ©New Straits Times
(Used by permission)
PUTRAJAYA: Effective Sept 1, the retail price of petrol will be based on the
average monthly market price of world crude oil with the government maintaining
the subsidy rate at 30 sen per litre, Datuk Seri Abdullah Ahmad Badawi said.
In a press statement reported by Bernama, the prime minister
said the retail price of petrol would be fixed on the first day of each month
under the new mechanism.
"The government also gives an assurance that the retail price of petrol will not
exceed RM2.70 a litre this year."
He said the government was making the revision after studying in detail the
recent price movement of crude oil, which was on a downward trend and had
dropped to US$122 (RM398.94) a barrel on Tuesday.
In June, the average crude oil price was US$132 a barrel and the government
subsidised petrol by 64 sen a litre.
According to the statement, the world crude oil price was
US$125 a barrel when the government restructured its oil subsidy scheme with
petrol getting 30 sen a litre in subsidy. On June 8, the price shot up to US$139
a barrel.
Although the price of petrol should have risen further by 40 sen a litre, the
government decided against it and on June 11 guaranteed that there would be no
more increases this year, said Abdullah.
Earlier, the prime minister said the possibility of a retail price reduction was
discussed by the cabinet following the recent drop in world crude oil prices.
He dismissed claims that the move was a "by-election gimmick", saying it had
been discussed before Parti Keadilan Rakyat de facto leader Datuk Seri Anwar
Ibrahim's sudden decision on Thursday to contest in Permatang Pauh.
"Three cabinet ministers spoke (to the media) about this before I could say
anything. How could it be a gimmick?" he said at a press conference held after a
meeting with the Crown Prince of Brunei, Al-Muhtadee Billah, and his wife
Pengiran Anak Sarah Pengiran Salleh at his office yesterday.
"God willing, world prices will continue to go down and naturally our prices
will also be reduced."
The pump price for petrol went up by 78 sen to RM2.70 per litre and diesel by
RM1 to RM2.58 a litre following a cut in the fuel subsidy in June.
World oil prices hit a record US$147 a barrel early last month but have slipped
over the past week.
The New York price for light, sweet crude closed at just above US$124 a barrel
on Thursday due to bad economic news in the United States.
In Kuala Lumpur, Deputy Prime Minister Datuk Seri Najib Razak said the cabinet
was keeping a close watch on world oil prices.
"If the downward trend continues, it is only right for it to be reflected in
domestic prices," he said after launching the Amanah Raya scholarship programme
for Islamic Studies at Al-Azhar University.
On the meeting, Abdullah said Brunei and Kuala Lumpur would hold more sports
programmes to encourage youths from both countries to take part.
This is the Crown Prince's first visit to the country.
"Both of us took the opportunity to exchange ideas to encourage meetings and
interactions between young people of both countries. This can be done through
activities such as sports and education.
"There are already Brunei students studying in our universities, schools or
institutes but more activities should be held for young people in both
countries," the prime minister said.
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Circular No 297/2008
When the PM announced an increase in petrol & diesel prices in June, businessmen were quick to increase prices of their goods/services. Although the federal government was supposed to control such price hike some of which were indiscriminate and unjustified, consumers have since been paying about 20 to 30 percent higher for their daily needs, a financial hardship that goes unheeded by the enforcement agencies.
Now that global oil price is declining, naturally our petrol and diesel prices have to follow the trend and we do not owe the government any gratitude for that.
So we may pay less for petrol and diesel from next month but what about the prices of other goods/services? Shouldn't these prices be adjusted as well? Or are they adjusted only when there is an increase? The government, whilst monitoring oil prices should not forget that it is the increase of other consumer goods/services that is killing ordinary men on the street. It is therefore vital that the government ensure not only a reduction in oil prices but more importantly those of such goods/services.
Otherwise any effort of the government to curb inflation (which is at its 25 year high) will be meaningless.
Chong Siew Ean