Innovate, improve efficiency to reduce petrol prices - Saifuddin Nasution

Domestic Trade and Consumer Affairs Minister Saifuddin Nasution Ismail is calling on petrol companies and petrol station operators to be more innovative and efficient in their operations to reduce petrol pump prices.

He said the government had formulated the Competition Act 2010 to drive competition among businesses to offer better prices for consumers.

Saifuddin, however, said in reality, not all competitive models are beneficial to the public.

"Take petrol stations. For example, we have six petrol companies that created 3,500 petrol stations where the core business is selling petrol and diesel," he said at the Level Competition and Cost of Living Symposium at Putrajaya.

He said these petrol stations set their petrol price at the ceiling price despite no rules barring them from selling at a lower price.

"There is competition, but it does not bring down the (petrol pump) price. We are saying the competition is good, but it does not happen in the petrol business. So, how can we change the situation?"

Saifuddin said the ministry would propose to petrol companies to improve their efficiency and innovate their operations to reduce cost.

"The petrol business is not a margin business but a volume business. You can save cost when you provide good service and operate innovatively and efficiently.

"Gradually, you can offer a better price to consumers, and they will come to your petrol station," he said.

Saifuddin said the government has done its part by implementing the Automatic Price Mechanism (APM) and provided subsidies.

He called on petrol companies and dealers to play their part in providing competitive pump prices.

There is a time where the government should interfere, particular in this case, to ensure that competition takes place for the sake of the public good, said Saifuddin.

Petrol station operators can reduce the number of foreign workers by encouraging consumers to fill up their own vehicles, he said.

Speaking to the media after the symposium, Saifuddin said his ministry would first suggest to petrol suppliers to improve their operations.

He said no timeline would be set but he hopes the companies can act on this immediately and the ministry will be monitoring the pump prices.

If the petrol companies decide to remain passive on the proposal, the ministry will engage them in meetings so that these companies can see the need to improve, Saifuddin added.

RON95 petrol price will be floated after the implementation of the targeted fuel subsidy scheme next year. - Mkini