A motorist fuels up at a petrol station. File Photo
KUCHING: Sarawak Petroleum Products Agents Association says petrol station retailers in Sarawak welcome the announcement from the Ministry for Domestic Trade, Cooperatives and Consumerism (KPDNKK) regarding the price ceiling implementation.
According to the association, the price ceiling will not only benefit consumers but also keep petrol stations nationwide from engaging in price fixing or face unwanted closures.
“The ceiling price for fuel announced by the minister is regarded as a far sighted win-win situation for all parties including motorists and the general public.
“With the proposed approach, consumers will enjoy real-time fuel prices calculated based on the APM (Automatic Pricing Mechanism), which take into consideration foreign exchange rates,” said the association’s president Edwin Banta.
Fuel prices are determined by the APM which relies on two main factors, namely the Means of Platts Singapore (MOPS) and the ringgit-US dollar exchange rate, based on the average of the previous month.
On top of that, there is also a fixed cost of 31.73 sen per litre comprising 5 sen alpha (difference between Mops and oil purchased at refinery), 9.54 sen for operating expenditure, 5 sen profit for oil company and 12.19 sen profit for petrol dealer.
Petrol station retailers have also been assured by the ministry that there will be more consistent price changes at a manageable level.
“Retailers are also looking forward to the government to increase the fuel commission as it is long overdue when expenses and everything else has gone up in price, including minimum wage which has increased twice so far,” he said.
The costs of being in the fuel retailing business have increased significantly over the years and most retailers are very much affected by volatile price changes in 2016, Edwin pointed out.
The weekly retail price of petrol and diesel will be announced every Wednesday, according to the Minister Datuk Seri Hamzah Zainuddin from next week onwards.