Petroleum products can be sold at prices below the government-stipulated levels to foster competition amongst retailers, said domestic trade and consumer affairs (KPDNHEP) minister Datuk Seri Saifuddin Nasution Ismail.

According to the minister, all 3,500 petrol stations from the six main representatives in the industry are currently selling petroleum products according to the automatic pricing mechanism (APM), which pegs the price of RON 95 petrol to RM2.08 per litre until the end of this year, Bernama reported.

The retail prices of petroleum products could be reduced if the six petroleum companies practised the principle of competition through innovation and efficiency rather than focusing on the business based on petroleum products, said the minister.

“If it is implemented, we can see petrol stations selling at different prices. For instance, if Shell is selling at RM2.06, Petron RM2.07, then go to BHP which is retailing at RM2.04,” he added.

“Petrol retailing business is a business of volume not margin which means competition among station operators can take place. How much to be reduced depends on the operator as they need to make comparison in terms of costs and quality of service offered,” he continued.

The government is also prepared to provide support for petroleum companies, including the provision of certain benefits for taking part in price reductions, said Saifuddin Nasution. The current RM2.08 per litre price cap for RON 95 will be removed once the targeted fuel subsidy is in place, and its price will be floated in a similar manner to that of RON 97 petrol currently.