Quoted from The Star

Shahrir said Fomca had proposed that the petrol floor price be set at RM3 per litre to encourage the prudent use of petrol, promote the use of public transport and push for development in alternative energy.

Has the Federation of Malaysian Consumers Associations gone nuts suggested the floor price for petrol to be set at RM3 per litre? Malaysians had been sufferring since the petrol price was increased to RM2.70 per litre and are now relieved that the price has gone down to RM2 per litre and may reduce further.

The government has also set RM2.70 as the ceiling price, and now we hear consumer associations want RM3 to be the floor price, which means we are going to pay RM3 per litre, or more if their suggestion is implemented.

A high petrol price will lead to an even higher inflation and increase in price of essential items such as food. Price of much of the essential items have gone down recently, thanks to the decrease in fuel prices. The suggestion by Fomca will do more harm than good to the people.

The government hinted that the price of petrol may be further reduced by another 15 sen per litre by end of this month.

Should this materialize, we will be paying for RM1.85 per litre of RON97 petrol, lower than the RM1.92 price we paid from March 2006 to early June 2008.

Domestic Trade and Consumer Affairs Minister Shahrir Samad said further reduction was “not impossible” judging from the decline in global crude oil prices.

“Malaysians can expect good news and pay less for petrol. As it is, consumers have been paying unsubsidised petrol the past few days. But the Government will have to continue to subsidise diesel and gas so the money is channelled for these purposes,” Shahrir said.

PLUS has announced a 10% discount on Class 1 vehicle users who travelled on the North-South Expressway (NSE) and North-South Expressway Central Link (ELITE) between 12am to 7am from 1 January 2009 to 31 Dec 2010. While the move is seen as a good move to help travellers reduce their travelling cost, I foresee several potential pitfalls to the implementation.

We need to take note that the discount is applied based on the time of exit at the toll plaza on these expressways regardless of the time of entry.

What are the problems that may arise?

Drivers may be tempted to over-speed in order to exit the expressway by 7am. This will lead to an increase in expressway accident rates, thus endangering other users of the expressways. Will the traffic cops set up speed traps between 5am to 7am to nab them?

For drivers who were about to exit the expressway close to midnight, they might drive too slow to ensure they only exit the expressway after midnight. Some drivers might even take a break just before the toll plaza and wait for midnight before proceeding to make payment. This will result in a clogged up traffic near the toll plaza.

So, what is the plan by PLUS to overcome such possible scenarios?

Shannon Teoh
The Malaysian Insider

KUALA LUMPUR, Nov 18 — Domestic Trade and Consumer Affairs Minister Datuk Shahrir Samad revealed today the government has stopped subsidising petrol since Nov 1 and has been effectively collecting taxes instead on petrol consumption.

Speaking to reporters in Parliament, he explained that even after the 15-sen drop today, which saw RON97 petrol dropping to RM2 per litre, and RON92 and diesel down to RM1.90, the government was no longer subsidising petrol at the pumps.

“Even if prices return to RM1.92, we will still have a bit of surplus,” he said, adding that subsidies had disappeared once the global price of oil had dipped under US$65 per barrel.

Current prices are hovering at US$55 per barrel.

As oil companies take a 19-sen cut and fuel station operators take 12 sen, it can be inferred that the cost price of RON97 petrol is currently below RM1.61 if the government can still generate income at RM1.92.

Shahrir explained that the difference between petrol pump prices and the cost plus commission for the companies and operators was being returned to the government effectively as a form of tax.

This gels with the 2009 Budget winding-up speech by Finance Minister Datuk Seri Najib Razak where he claimed a projected RM7 billion savings in fuel subsidies will be utilised to stimulate the troubled economy.

The statement was puzzling as the government had earlier said it would maintain a 30-sen fuel subsidy to keep pump prices below market prices.

[Read full article...]

Price of petrol and diesel at the pump will be reduced by another 15 sen effective midnight.

The price of RON97 petrol will be sold at RM2.00 per litre while RON92 petrol and diesel will be sold at RM1.90 per litre.

This is the fifth price reduction since the sharp price hike imposed in June 2008. This follows the drop in world crude oil prices which is now around USD60 per barrel.