Malaysian fuel price review requires more time: Rafizi

The federal government of Malaysia will require more time to decide on the possibilities of lowering the retail price of fuels in the country, despite current downward trend of global crude oil prices, reported the New Straits Times.

The Malaysian government needs to take into account many factors, including the current financial capabilities and allocation for economic activities which have multiplier effects, economy minister Rafizi Ramli said.

“This is beyond the issue on the (price setting formula), but more importantly, the current economic situation,” Rafizi said, noting that with the current global crude oil price between US$83 to US$85 per barrel (RM364 to RM373 per barrel), some have said that the price of crude oil has dropped over the past four to five months.

“Hence, when the global crude oil price has dropped, is it enough for us to lower the retail fuel price? Of course, for those who understand the oil and gas sector, [they] will be asking the question,” Rafizi said, adding that the government will have to study its financial capabilities before reviewing the retail prices of fuels.

Rafizi added that the formula for deciding the retail prices of fuels in Malaysia continues to be relevant, and that the formula should be retained as it takes into account the changes in global crude oil prices as well as the suitable ceiling price for fuel.

In June this year, then-finance minister Tengku Datuk Seri Zafrul Abdul Aziz said that the fuel subsidies will reach RM30 billion this year, with a projection made based on Brent oil price. Last week, newly appointed prime minister Datuk Seri Anwar Ibrahim said that relevant government ministries have been given two weeks to discuss and analyse the matter of targeted subsidies, including for fuel.

The ceiling price of RON 95 petrol is RM2.05 per litre, which was set by the Malaysian government in February 2021. As of December 1, 2022, the retail price of RON 97 petrol is RM3.85 per litre, or a 10 sen drop from the preceding week, which ended an eight-week run of being priced at RM3.95 per litre since the previous adjustment from RM4 per litre on October 6.

Diesel fuels, meanwhile, also continue at their respective ceiling prices of RM2.15 per litre for Euro 5 B10 and B20 blends, while Euro 5 B7 diesel continues at RM2.35 per litre.