Finance ministry says retail price of RON95 and diesel were set by average prices of the fuel in the world market and also the strength of the US dollar.
PUTRAJAYA: The retail prices of RON95 and diesel are expected to go up in January due to an increase in the price of crude oil in the world market this month, said the finance ministry’s strategic communications director Lokman Noor Adam.
He said the retail price of RON95 and diesel were set according to the average prices of the fuel in the world market for a month, as well as being influenced by the ringgit’s movement against the US dollar.
“The average (here) means the prices from day one to 31 (of the month), divided by 31 days. Not the global oil prices at the end of the month as understood by certain quarters.
“With the current strengthening of the US dollar against the ringgit, the cost of purchasing crude oil will also increase.
“Hence, the surge of the retail fuel price in Malaysia,” he said in a statement here today.
Lokman said the retail prices of fuels in the country had been decided using the controlled flotation method since Dec 1, 2014 following a drop in global oil prices then, which saw the prices being determined by the market on a monthly basis.
Earlier, Lokman had said there were still many people who could not accept the fact that the government needed to discontinue giving “bulk subsidies” and help the people by distributing the subsidy to the right group.
He said the previous “bulk subsidies” given to the people meant that both the rich and the poor received the same amount of subsidy.
“For instance, in July 2014, we’ve subsidised RM0.6843 for each litre of RON95. Unfortunately, the rich people used the fuels in bigger quantity which was far more than the poor people.”
Foreigners in the country also enjoyed the subsidised fuel then, he added.
‘Fuel subsidies were benefiting the rich more’
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