diesel pump

Political party PAS is asking the government to bring about a ceiling price on fuel, for both petrol and diesel, which will allow petrol station operators to compete with each other, The Sun reports.

Vehicle owners can then have the option to shop around and fill up at stations that offer the cheapest fuel, said Dr Dzulkefly Ahmad, the party’s research centre executive director. He added that the government should consider looking into this proposal – in which the mechanism would mirror that as implemented in the United Kingdom – for the benefit of the rakyat.

“The rakyat must benefit and a healthy competition on the price of petrol and diesel will be good. Currently in Malaysia, Petronas has 1,000 stations, Petron 500 and Shell has more than 1,000 outlets. Consumers can choose their stations if the mechanism on pricing is in place,” he told the publication.

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Dzulkefly also suggested that the MOPS (Mean of Platts Singapore) index – which defines the cost of product at the start of the Automatic Pricing Mechanism (APM) system in place – be replaced with another benchmark, since the country has its own infrastructure to produce and filter crude oil for the nation’s consumption.

The APM is the formula used to calculate the price of fuel, and has been in place since 1983. Its function is to stabilise the price of petrol and diesel in the country to a certain extent via a variable amount sales tax and subsidy. With it, the retail price only has to be changed if the difference in price exceeds the threshold of the tax and subsidy, at the discretion of the government.

Read our detailed story on the APM and how fuel prices are calculated in Malaysia.