KUALA LUMPUR – The setting of a ceiling price for fuel is one of the options the government is considering to tackle the issue of the impact of escalating oil prices.
Second Finance Minister Datuk Seri Johari Abdul Ghani said in certain advanced countries the governments leave fuel prices afloat, and the oil and gas industry players will determine them.
“It is up to the government to set a ceiling which is deemed fair for all.
“When we (the government) have decided on the ceiling price, whether they (oil and gas industry players) want to sell the fuel at lower prices for promotional purposes, we leave it to them. This is one of the options we are looking at,” he said.
Johari told reporters this on the sidelines of the Chinese New Year Celebration 2017 hosted by the Malaysia Retail Chain Association here on Tuesday night.
He said the government has to be mindful whether the policy will be a problem for those living outside the city.
“We are afraid the industry players will pay more attention in obtaining revenue from consumers in the city, and don’t want to do the same for those in the outskirts. We have to be wary of this too,” he said.
On the reintroduction of fuel price subsidies, Johari said it will not be good for the Malaysian economy and are not sustainable.
“We are aware of the (rising) fuel prices. We will monitor them. If they keep on increasing and if there is additional revenue, I think the government can consider a different form of assistance to the lower (income) groups, but not those who are well off,” he said.
“However, as of now there isn’t a formula yet, but the government has already decided that it can’t reverse this (subsidy) policy,” Johari said.
Johari said the government is mindful of the cost of living and it is identifying the pressures of the bottom 40% (B40) income group.
According to the Economic Report 2015/2016, the B40 group comprised households with a monthly income of up to RM3,855.
Johari said if the Bantuan Rakyat 1Malaysia (BR1M) programme is insufficient, the government will consider increasing it to cushion the impact of the fuel price increase. “However, if fuel prices decline in the future, the government needs to take back BR1M. These are the variables and formulas that the government needs to undertake.”
Johari said in terms of fuel prices, countries in the world share similar fate.
“We are unable to control crude oil prices and as a result when they escalate, Malaysian fuel prices experience the same increase,” he said.