FUEL-PRICE-MALAYSIA-BREAKDOWN

A simplified version of the formula used to calculate the price of RON 95 petrol and diesel will be made public soon, Domestic Trade, Cooperatives and Consumerism minister Datuk Seri Hasan Malek has said, according to a report by The Star.

“We shall seek approval from the Ministry of Finance first and then we will include a simplified version of the calculations on our website,” he said, adding that although the calculation is complicated, he understood the need for the people to know how the prices are derived.

The table on the left, from February 2009, outlines the Automatic Pricing Mechanism, which has been used since 1983 to compute fuel prices and stabilise them to a certain extent via a variable amount of sales tax and subsidy. Read the full explanation of the APM here.

However, now that subsidies for RON 95 petrol and diesel are no more and their pricing is based on a managed float system, the calculations may be different – possibly similar to how the price of RON 97 petrol is derived. We eagerly await the release of the formula – it might even explain how the price of diesel has increased post-float.