KUCHING: Petrol station retailers in Sarawak welcome the announcement by the Ministry of Domestic Trade, Cooperatives and Consumerism (KPDNKK) to implement a ceiling price for fuel.
Sarawak Petroleum Products Agents Association believed that the move would not only benefit consumers but would also protect petrol stations nationwide from unwanted closures.
“The ceiling price for fuel, as announced by the ministry, is regarded as a far-sighted, win-win situation for all parties, especially motorists.
“Through this approach, consumers would enjoy real-time fuel price calculated based on APM (automatic pricing mechanism), which takes into consideration foreign exchange rates,” association president Edwin Banta said in a statement released yesterday.
Petrol station retailers are also assured by the ministry of more consistent price changes at manageable levels.
“The retailers are very much relieved that the government would not allow any price war or price-fixing.
“They (petrol stations retailers) admit that the fuel retail business is very competitive, driven by quality services provided at each site.
“However, the retailers are looking forward to the government increasing the fuel commission as it is a move that has been long overdue in view of expenses and prices of many things going up, including the minimum wage which has shot up twice so far,” said Edwin, pointing out that the majority of fuel retailers were very much affected by volatile price changes last year.
According to Domestic Trade, Cooperatives and Consumerism Minister Datuk Seri Hamzah Zainuddin, the weekly retail prices of petrol and diesel would be announced every Wednesday – beginning March 29.
“After joint discussions with oil companies, we have agreed to announce the weekly prices of petrol and diesel every Wednesday and the price (for the first week under the new system) will be effective March 30,” he was quoted as having said via a live broadcast on TV1 recently.
Hamzah said any company wishing to sell below the weekly ceiling price must seek approval from KPDNKK.
“Petrol dealers who wish to hold promotions and provide discounts on the set price can do so by seeking approval from the ministry.
“All oil companies and petrol dealers are reminded to abide by the new pricing.
“Stern action will be taken against those who sell petrol or diesel at prices other than the levels set by the government,” he underlined.
Hamzah said the decision to implement the new mechanism received cabinet approval on Feb 22, adding that the currency mechanism – based on monthly pricing – could not keep up with fluctuations in oil prices and currency exchange as well.
“Under the current managed float, we see prices go up and down drastically, causing concern to consumers and petrol dealers.”
Hamzah said the new mechanism was based on a consultation process with stakeholders in an attempt to resolve this problem.
Fuel price is determined by the APM, which relies on two main factors – the ‘Means of Platts Singapore’ (MOPS) and 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 five sen alpha (difference between MOPS and oil purchased at refinery), 9.54 sen for operating expenditure, five sen profit for the oil company, and 12.19 sen profit for the petrol dealer.
Meanwhile when contacted on Thursday, Consumer Voice Association for Sarawak (Covas) said it was called to the national meeting regarding the weekly announcement of the price but could not comment much as the practice of announcing fuel price weekly would be on a trial basis.
Covas president Michael Tiong said the association would first have to see the effectiveness and feedback from consumers.