More Time Required To Evaluate On Fuel Price Review - Rafizi Ramli

Despite the present downward trend in the price of crude oil on a worldwide scale, the federal government will need more time to decide whether or not to cut the retail fuel price.

The government must consider a variety of things, according to economy minister Rafizi Ramli, including the availability of funds and funding for economic activity with multiplier effects.

"The current economic climate is more significant than the problem with the formula (used to establish prices).

"The issue is that the price of crude oil is currently fluctuating between US$83 and US$85 per barrel, and others claim that it has fallen during the past four to five months after crossing the US$100 per barrel price threshold.

"Therefore, can we reduce the retail price of fuel now that the price of (global crude oil) has decreased? Of course, he'll be asking the question for people who are familiar with the oil and gas industry: "After taking part in the Padang Serai parliamentary election rally in this location last night, Rafizi spoke to media.

The government should assess its current financial capacity before opting to alter the retail fuel price, according to Rafizi, who is also the deputy president of PKR.


Photo credit: theedgemarkets

How much additional funding do we need to invest given the existing RM2.05 per litre pricing (for gasoline) and the real government earnings at this time? said Rafizi.

The Pandan MP continued by saying that the government should investigate if boosting subsidies to lower fuel prices is worthwhile in comparison to allocating the funds to other economic activities that have multiplier effects.

"Because we don't just go into any new organisation or administration, whether it be in the government or a business, we need extra time to study each and every component.

"We know where we're going, but first we need to understand what we have, which are the good ones and which should be fixed. We need to focus on matters that we need to do away with, introduce new approaches so of course, all these will be time consuming.

"It is risky if all ministers make various announcements after the first 24 hours (after being sworn in); this is a formula for disaster.

Because we are managing the economy, he continued, "I think we need to take one step at a time. This is not like managing your own company."

Rafizi continued by saying that his formula for determining the retail price of petroleum, which the government had previously established, was still applicable and should be kept.

According to him, the formula should be kept in place for the time being because it considered fluctuations in the price of crude oil on a worldwide scale as well as the appropriate retail fuel ceiling price.

Currently, the retail price for RON 95 petrol and diesel is fixed at RM2.05 and RM2.15 respectively.

For the record, the government offers subsidies for RON 95 gasoline, diesel, and LPG (LPG).

It was previously claimed that the government would spend up to RM28 billion in 2022 on just the subsidies, according to the then-finance minister Tengku Datuk Seri Zafrul Tengku Abdul Aziz.

Malaysia was the most affordable of the nine Association of Southeast Asian Nations (Asean) member countries included due to the price of its subsidised gasoline (RON 95).

As of this month's first week, Malaysia's gasoline prices are RM3.90, 47.44% less than those in Indonesia, and 54.24% less than those in Vietnam (RM4.48).