With fuel prices expected to decline further amid a global oil war, the Petrol Dealers Association of Malaysia (PDAM) has suggested price floors be introduced for petrol and diesel that could be beneficial to its members, consumers and the government.
In a report by Berita Harian, PDAM president Datuk Khairul Annuar Abdul Aziz said that with the price floors, any proceeds from a sharp drop in oil prices that would also affect fuel retail prices could be retained for future use.
Using the current situation as an example, where crude oil prices are at around US$35 per barrel, RON 95 petrol should be priced at RM1.32 per litre instead of RM1.89 per litre currently. The current price ceiling for RON 95 petrol is at RM2.08 per litre, while it is RM2.18 per litre for Euro 2M diesel.
“Instead of lowering the price by 57 cents per litre, the government could only lower five or 10 cents a litre, the excess can be kept by the government to be used as a subsidy when crude oil prices jump to higher levels in the future,” said Khairul Annuar.
“At the same time, petrol station operators are not caught off guard by sudden declines and are still able to absorb losses as it doesn’t involve large cost [increases],” he added. The PDAM president also pointed out that the petrol station industry could face a loss of up to RM150 million if the government reduced fuel prices (RON 95 petrol) by 57 cents a litre, which could cause smaller stations to close.
“Our income is around 10 to 15 cents a litre. If it goes down or increases by five cents, for example, our operations would not be heavily affected. It is also fair because price fluctuations are stable and not too large,” said Khairul Annuar.
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AI-generated Summary ✨
Comments express frustration and skepticism towards petrol dealers and PDAM, criticizing their complaints about losses during price drops while profiting during price increases. Many believe dealers are profiteering, owning multiple stations, and seeking subsidies or price floors for guaranteed profits. Several commenters support the idea of market-based pricing without intervention, emphasizing that consumers benefits when prices are low and that dealers should accept losses during downturns. Some suggest implementing ceiling and floor prices, while others criticize the dealers' greed and government subsidies, questioning the fairness of ongoing interventions. Overall, sentiments are mixed, with many viewing the dealers' protests as self-serving and advocating for a freer market approach that lets prices fluctuate naturally.