Managed float system on sale of non-subsidised fuel may see abuse, says See

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KUCHING: The government’s decision to scrap the subsidies for RON95 petrol and diesel and sell them based on a managed float system may mean that the consumers can enjoy the full benefit of falling global oil price, but the system could also be abused, said Batu Lintang assemblyman See Chee How.

“For November 2014, the subsidy for RON95 and diesel is 13 sen and 12 sen respectively.

“The justification of the government to remove the subsidy and adopt a managed float system or the automatic price mechanism (APM) is because the from Nov 1 to 19, the average RON95 price under APM has fallen to RM2.27 per litre, which is lower than the subsidised retail price of RM2.30.”

Mindful of the heavy burden for the people under the circumstances of rising global oil prices, See cautioned the abuse of the system.

“While it is good that the move will ensure that the consumers can enjoy the full benefit of the falling global oil price under this APM mechanism, it can be abused during the rising global oil price.”

See, who is also state PKR vice chairman, called on the government to make use of the subsidy sum saved from RON95 and diesel during the time of falling global oil price, to subsidise the fuel consumed in the rural areas of the state, as well as other essential items including food.

He also called for accountability and transparency under the new system.

“The global oil prices and those of RON95 and diesel under the managed float system must be revealed each month, and at the same time the price of the fuel should be fixed for the month,”

See also called for a commitment from the government to maintain the APM price.

“The government must make it a commitment to maintain the APM prices, so that when global oil prices rise and pushing up those of RON95 and diesel under the ‘managed float system’ to be above the APM prices, the subsidiszed APM prices must be used to ensure that there is no additional burden on the people.”

The government yesterday announced that it would from Dec 1 abolish subsidies for RON95 petrol and diesel.

Domestic Trade, Cooperatives and Consumerism Minister Hasan Malek announced that both types of fuel would be sold based on a managed float system.

RON97 petrol has been under a managed float system since July 2010 with its price slashed from RM2.75 to RM2.55 on Wednesday.