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Think tank tells Putrajaya to come clean on fuel price formula

 | August 23, 2017

IDEAS says that lack of transparency fuels public anger over the discrepancy between global oil prices and petrol pump prices.

Azrul-Mohd-KhalibPETALING JAYA: The unhappiness among the people over increases in fuel prices can be subdued if Putrajaya reveals the exact method of calculating the weekly petrol and diesel prices, says a think tank.

The Institute for Democracy and Economic Affairs (IDEAS) says that the public can’t be faulted for feeling “in the dark”, upset or confused over discrepancies between global crude oil prices and the retail price of fuel, which is set by the government.

IDEAS external manager Azrul Mohd Khalib told FMT that this was due to a lack of transparency as to how the weekly price of fuel is calculated.

He was commenting on Prime Minister Najib Razak’s remarks yesterday that the people should know that he doesn’t have the power to control the weekly changes in fuel prices.

Najib lamented that when fuel prices went up, he is insulted, but when it goes down, no one says anything.

Petrol prices have increased now for four consecutive weeks now after having been on a steady decline during the Ramadan month, prior to Hari Raya Aidilfitri.

On July 26, the price of RON95 and RON97 petrol was RM1.97 per litre and RM2.22 per litre, respectively. As of last Wednesday, it is RM2.15 per litre for RON95 and RM2.43 per litre for RON97.

Later today, the domestic trade, cooperatives and consumerism ministry will be announcing the new price effective from midnight.

“Of course Najib, or any country for that matter, cannot control global fuel prices.

“However, when the people see a discrepancy between the global oil prices and those at the pumps, then they’re going to be upset,” Azrul said.

Azrul noted that Domestic Trade, Cooperatives and Consumerism Minister, Hamzah Zainuddin had said the method of calculation was based on several formulas and had taken into account the global market prices and the ringgit’s position.

“He also emphasised that the method was also used at the international level. This is reassuring but what would even be more reassuring is to know the actual formula used.

“Increasing transparency on this issue would help alleviate frequent tension and unnecessary conflict each time the petrol price is adjusted.”

The truth is the public feels a real disconnect between global daily fuel prices to what they have to pay daily says PKR's Wong Chen.

The public feel a real disconnect between global daily fuel prices to what they have to pay daily says PKR’s Wong Chen.

Meanwhile, PKR’s Wong Chen said Najib shouldn’t forget that with global oil prices set on a daily basis, there was “discretionary space” to adjust the prices.

“The truth is the public feels a real disconnect between global daily fuel prices to what they have to pay daily and this creates a perception of the government profiting on fuel prices.

“Whether this is true or not, the government has to answer.”

Wong, who is Kelana Jaya MP, said that unless and until Putrajaya switches to a daily fuel mechanism model, there will not be full transparency and accountability on the matter.

Last November, economist Firdaos Rosli, from the Institute of Strategic and International Studies Malaysia, said it was inevitable that Putrajaya would eventually shift to pricing fuel according to the daily price of crude oil.

 

New formula for fixing retail prices of fuels next week

Economist: Paying for petrol based on daily prices inevitable


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