Price difference of RON95, RON97 does not add up

DAP’s Teresa Kok asks if the government is using the managed float system to recoup past subsidies the government has had to bear.

KUALA LUMPUR: Coming in the wake of explanations by the government that the 3 sen increase in diesel price was due to the huge subsidy it enjoyed before, DAP now wants to know why the price difference between RON97 and RON95 is so small and if the past tax exemption on RON95 was the reason behind it.

In a statement, DAP National Vice Chairperson Teresa Kok asked, “So is past sale tax exemption for RON95 taken into consideration when fixing the new RON95 price effective yesterday?”

Saying the price of RON95 should be much lower, Teresa demanded that a detailed explanation be given by Domestic Trade, Cooperatives and Consumerism Minister Hasan Malek as to how the managed float system was used, and what factors were taken into consideration when calculating the price of fuel.

She said given the prices of RON95 and RON97 as of yesterday, it would mean RON97, which was a premium grade fuel, was cheaper to produce.

The present price of RON95 is RM2.26 per litre while RON97 is RM2.46 per litre.

She asked, “Is Hasan going to say that it is cheaper to produce RON97, the premium grade? So much cheaper that even with the imposition of 58 sen sales tax, it should only differ by 20 sen from the RON95 price?

Teresa said general statements alone were not “satisfactory enough” and that the government must come clean on how the prices were fixed.