We’re slightly over two weeks away from April 2017, when retail pump prices will no longer be set by the government, as is the case now. The free float will be capped by a weekly ceiling price for petrol and diesel set by the authorities, but oil companies are free to sell fuel at any price below the ceiling figure.
Such a system will give consumers a better grasp of the retail trend compared with the current monthly change of price. It will also help avoid drastic changes in fuel price due to the shorter period of calculation and any change will be gradual, second finance minister Datuk Seri Johari Abdul Ghani said, reported by Bernama.
“If we wait a month, sometimes it (petrol and diesel prices) can see a sudden rise of up to 25 sen. When it rises so much, it is hard to make any adjustment and the government is forced to absorb part of it as subsidy,” he told reporters today, reiterating that although the government sets the ceiling price, it will be up to the oil companies to sell at a lower price.
Will we see a price war as competition between brands heat up? The Petrol Dealers Association of Malaysia (PDAM) was initially against weekly fuel price revisions, saying that it could possibly result in smaller players closing shop, leading to a monopoly that will not benefit consumers. A few days later, PDAM made a U-turn and is now going with the flow.