KUALA LUMPUR, March 7 — The government’s planned new weekly ceiling price scheme will alleviate its burden to provide fuel subsidies and is a sign the 14th general elections is getting near, an investment bank has said.
Singapore’s UOB Kay Hian said it believed the new weekly ceiling price scheme could see consumers benefiting from the potential price war.
The bank in its analyst report indicated this to be a “pre-election move” which “effectively shifts the government’s burden of potentially imposing more fuel subsidies to the relevant industry players by way of competition”.
“If we assume the relevant components in the pricing mechanism will no longer be fixed, but subject to the overall price ceiling, the ultimate beneficiaries are the consumers,” it was quoted saying by local daily The Star.
In a separate report, Petrol Dealers Association of Malaysia (PDAM) president Datuk Khairul Annuar Abdul Aziz said the association will be meeting the Domestic Trade, Cooperatives and Consumerism minister today to discuss the details of the new scheme.
“We don’t know whether it will be petroleum companies that set a uniform price, or if every petrol station operator will each set their own fuel price? Currently there’s no details at all,” he was quoted telling local daily Sin Chew Daily yesterday.
He acknowledged that there was dissatisfaction among PDAM members regarding the new scheme, but refrained from making further comments owing to a lack of details.
Local daily New Straits Times yesterday reported Khairul Annuar as saying that PDAM had no issue with a weekly price announcement, but was instead disagreeing with the imposition of fuel ceiling price.
The introduction of ceiling price for fuel would result in a price war where petrol station operators cut their profit margins and would lead to many of them going bust, as well as a loss in job opportunities for locals, he reportedly said.
Last Saturday, Domestic Trade, Cooperatives and Consumerism Minister Datuk Hamzah Zainuddin said the ceiling price for fuel will be announced weekly from April 17 onwards, instead of monthly.
Hamzah had then said that the public will be informed of the current weekly ceiling prices at notices placed at petrol stations nationwide.