Wong Chen said the promise also lacked details as there was no commitment to how much subsidy would be given.
“A sincere offer would be to commit to the public on subsidy now without conditions. And commit that the bulk of additional oil revenue the government receives will be returned to motorists,” he told FMT.
He said this was because Putrajaya stood to earn additional revenue from the crude price hikes.
In a statement yesterday, the finance ministry said the government would identify “appropriate measures” to reduce the impact of fuel price hikes if the retail price of RON95 and diesel exceeded RM2.50 per litre continuously for three months.
The measures, it said, would not burden the people, and would also ensure the inflation rate was kept under control in the short and medium-term.
The government fixes retail fuel prices on a weekly basis, calculated using an automatic pricing mechanism, and announced every Wednesday.
RON95 petrol is being sold at RM2.38 per litre, up seven sen from last week. Diesel price rose by five sen to RM2.25 per litre.
Wong said at 2.50 per litre, all motorists would feel the pinch.
“On the flip side, the Najib government will be happy to receive extra oil revenue,” he said, adding that for every US$1 rise in global crude oil price, the government stands to make RM300 million in extra revenue.
Therefore, he explained, the rise from US$50 to US$70 per barrel would add some RM6 billion to the government coffers.
Wong predicted that the price outlook for crude oil would likely increase as the political drama in Saudi Arabia unfolded.
Saudi Arabia is the world’s largest exporter of crude oil and any hint of internal instability will drive prices up.
Crude prices have reached a two-year high after the arrests of high-ranking Saudi officials recently while rising tensions between Iran and Saudi Arabia have stoked fears of hostility in the region.
An anti-corruption crackdown in Saudi Arabia led by Crown Prince Mohammed bin Salman is widening with the detention of dozens of high-ranking Saudi officials and businessmen including 11 princes and four ministers.
Govt to act if RON95, diesel prices hit RM2.50 per litre for 3 months