Petrol pump dealers are pushing for an immediate meeting with the new Domestic Trade, Cooperatives and Consumerism Ministry (KPDNKK) to work on a viable new fuel retail policy.
Petrol Dealers Association of Malaysia (PDAM) president Datuk Khairul Annuar Abdul Aziz said the association hopes to be the first to meet the new KPDNKK minister as fuel price is one of the 10 main agendas on Pakatan Harapan’s 100-day manifesto.
“We hope to be the first because it is one of the main priorities and has been an outstanding issue that needs to be resolved,” Khairul Annuar told The Malaysian Reserve.
The new ruling government under Prime Minister Tun Dr Mahathir Mohamad had listed 10 items that it hopes to achieve within the coalition’s first 100 days in office, which include targeted petrol subsidies, stabilising fuel prices and the abolishment of the Goods and Services Tax.
Pakatan Harapan had proposed to introduce a monthly quota of fuel subsidy to targeted groups.
The fuel subsidy is intended for motorcycles with an engine of under 125cc and cars with an engine of under 1,300cc.
Among the cars on the local market with an engine capacity of under 1,300cc are Perodua Bezza, Proton Iriz, Perodua Myvi, Suzuki Alto, Mitsubishi Mirage and Kia Picanto.
Khairul Annuar did not downplay the feasibility of the proposal, but he had urged the government to initiate discussions with PDAM and the automotive community to devise a win-win formula.
He said apart from stratifying subsidies on engine capacity, the government could also consider giving subsidies based on vehicle segments.
“I think a targeted subsidy is okay. If the government wants to implement an overall subsidy, it is also fine, but it depends on the capacity of the government. One sen of subsidy amounts to RM180 million annually,” he added.
Khairul Annuar also welcomed the idea of stabilising oil prices, but stressed that the price point should be made clear.
“If the government is looking at RM1.50 versus the current price of RM2.20, they will have to pay a huge sum of subsidies. And if they are going to keep the fuel price at a stable rate, they will have to hold it for quite some time,” he said.
In 2014, the Barisan Nasional-led government opted to remove fuel subsidies to shore up the national economy — an effort that would save up to US$6 billion (RM26 billion) annually.
However, oil prices have since been on the rise and, together with the weaker ringgit, had resulted in an inflation hike and higher cost of living.
Currently, fuel prices are determined via a managed float system that is adjusted on a weekly basis.
The weekly price system, implemented on March 29 last year, has been a bane for retailers who have groused about thinning margins due to the spiralling costs of fuel and levy payments for foreign workers. Over 300 petrol stations nationwide have so far closed up their shops.
Khairul Annuar said a more stable price mechanism is needed to keep operations running, but it should not be at the expense of burdening the rakyat with too high of a price.