KUALA LUMPUR, Jan 4 — The retail prices of RON95 and RON97 petrol, as well as diesel, will be reduced to RM1.93 per litre, RM2.23 per litre, and RM2.04 per litre respectively from tomorrow until January 11, the Finance Ministry announced today.
RON95 and RON97 petrol retail prices fell 27 sen from RM2.20 and RM2.50 per litre respectively, while diesel dropped 14 sen from RM2.18 per litre.
Finance Minister Lim Guan Eng said the retail prices of petrol would change weekly according to the automatic pricing mechanism (APM), in line with the global trend of falling oil prices.
“The announcement of retail prices will be made every Friday and comes into effect from Saturday to Friday,” Lim said in a statement.
“It must be stressed that these new prices take into account commissions or petrol station operators’ margins, as approved by the Cabinet on 2 January 2019.”
The Pakatan Harapan (PH) government raised commissions for petrol dealers by 2.81 sen to 15 sen per litre for RON95 petrol, as well as by 3 sen to 10 sen per litre for diesel, compared to the current margins of 12.19 sen per litre for petrol and 7 sen per litre for diesel. Commissions were last revised over 10 years ago in 2008.
Petrol dealers previously met the prime minister to discuss the issue of petroleum prices, as a weekly float system would see losses incurred whenever prices fell, since they would have bought fuel stocks earlier at a higher price.
Despite the weekly fuel float system, the government will cap retail prices at RM2.20 per litre for RON95 petrol and RM2.18 per litre for diesel through subsidies.
“This new method is an initiative of the Pakatan Harapan federal government that has never been practiced before,” said Lim.
The finance minister added that the price caps will be in force until targeted RON95 petrol subsidies are implemented mid-year, after which the float system will follow market prices.