Minister: Fuel prices to be announced every Wednesday

The weekly retail price of petrol and diesel will be announced every Wednesday, said Domestic Trade Co-operatives and Consumerism (KPDNKK) Minister Hamzah Zainuddin.

Hamzah said the new system will begin next Wednesday (March 29).

"After joint discussions with oil companies, we have agreed to announce the weekly price of petrol and diesel every Wednesday and the price (for the first week under the new system) will be effective March 30," he said in a live announcement on RTM1.

Hamzah said any companies that wished to sell below the weekly ceiling price must seek approval from his ministry.

"Petrol dealers that wish to hold promotions and provide discounts on the set price can do so by first seeking approval from KPDNKK.

"All oil companies and petrol dealers are reminded to abide by the new pricing. Stern action will be taken against dealers that sell petrol or diesel at prices other than what is set by the government," he said.

Hamzah said the decision to implement the new mechanism received cabinet approval on Feb 22.

He explained that the current mechanism which is based on monthly pricing could not keep up with the fluctuation of oil prices and currency exchange well.

"Under the current managed float, we see that prices go up and down drastically, causing concern for consumers and petrol dealers," he said.

Hamzah said the new mechanism was based on a consultation process with stakeholders in an attempt to resolve this problem.

Fuel price is determined by the Automatic Pricing Mechanism (APM) which relies on two main factors - namely the Means of Platts Singapore (Mops) and ringgit-US dollar exchange rate, based on the average of the previous month.

On top of that, there is also a fixed cost of 31.73 sen per litre comprising 5 sen alpha (difference between Mops and oil purchased at refinery), 9.54 sen for operating expenditure, 5 sen profit for oil company and 12.19 sen profit for petrol dealer.

For detailed information, check out Malaysiakini's explanation how fuel prices are calculated here.- Mkini