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Thursday, February 9, 2017

Gov't mooting ceiling for fuel prices, says finance minister II



The setting of a ceiling is one of the options the government is considering to tackle the issue of escalating oil price.
Second Finance Minister Johari Abdul Ghani said in certain advanced countries, the governments would leave oil prices afloat, and the oil and gas (O&G) industry players would determine them.
"It is up to the government to set a ceiling which is deemed fair for all.
"When we (the government) have decided on the ceiling price, whether they O&G industry players) want to sell the oil at lower prices for promotional purposes, we leave it to them.
This is one of the options we are looking at," he said.
Johari told reporters this on the sidelines of the Chinese New Year Celebration 2017 hosted by the Malaysia Retail Chain Association in Kuala Lumpur last night.
He said the government has also to be mindful whether the policy would be a problem for those living outside the city.
"We are afraid the industry players would pay more attention in obtaining revenue from consumers in the city, and don’t want to do the same for those in the outskirts. We have to be wary of this too,” he said.
On the reintroduction of fuel subsidies, Johari said, it would not be good for the Malaysian economy and was not sustainable.
"We are aware of the oil prices. We will monitor them. If they keep on increasing and if there is additional revenue, I think the government can consider a different form of assistance to the lower groups, but not those who are well-off,” he said.
He said the government would come out with a mechanism.
"However, as of now there isn’t a formula yet, but the government has already decided that it can’t reverse this (subsidy) policy," Johari said.
Johari said the government was mindful of the cost of living and it was identifying the pressures of the bottom 40 percent (B40) income group.
According to the Economic Report 2015/2016 the B40 group comprised households with a monthly income of up to RM3,855.
He said if the Bantuan Rakyat 1Malaysia (BR1M) was insufficient, the government would consider increasing it to cushion the impact of oil price increase.

"However, if the oil prices decline in the future, the government needs to take back the BR1M. These are the variables and formula that the government needs to undertake," he said.
Johari said in terms of oil price, other countries in the world share a similar fate.
"We are unable to control the prices, and as a result when the prices escalate, Malaysian oil price experience the same increase," he said.
- Bernama

1 comment:

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