Several news outlets have reported yesterday that the price control order which sets the ceiling price for RON95 petrol at RM2.08/litre and diesel at RM2.14/litre has been removed based on the revocation order that was published in a gazette dated 3rd of June 2020. However, the Domestic Trade and Consumer Affairs Minister Datuk Alexander Nanta Linggi has said yesterday that the government has not removed the ceiling price and told the public not to be misled.
According to the gazette, the Price Control and Anti-Profiteering (Determination of Maximum Retail Price for Petrol and Diesel) (No.8) Order 2020 [P.U (A) 62/2020] is revoked with the approval of the minister on 10th April 2020.
In an official statement from the Ministry of Domestic Trade and Consumer Affairs, the minister says that there is no change in the pricing policy for retail prices of petrol and diesel. The price of fuel is determined through an Automatic Pricing Mechanism (APM) that is affected by the price of processed oil in line with the global crude oil prices.
He explained the purpose of the gazette was meant to enforce price control for retail petrol and diesel by oil companies and petrol station operators so that they do not exceed the prices set by the Finance Ministry. He added that his ministry had changed the mechanism for the control of retail prices of petrol and diesel through a directive issued under Regulation 12A of the Control and Supply Regulations 1974 under the Control of Supplies Act 1961. This was meant to strengthen enforcement and monitoring efforts in the event of any violation of the directive under the Act.
Better enforcement with 5x higher penalties
In a new press statement, the minister has emphasised that enforcement of petrol retail prices under the Control of Supplies Act 1961 was more effective because it carries a heavier penalty towards any petrol company or petrol station operator that sells fuel above the stipulated price. He shared that the Control Supply Act 1961 carries a maximum penalty of up to RM5 million versus RM1 million under the Price Control and Anti-Profiteering Act 2011.
It added that this is in line with the Ministry’s commitment to protect consumer rights and to ensure compliance from fuel companies and petrol station operator in terms of retail petrol diesel pricing that’s set by the government and to ensure that enforcement under the Control of Supplies Act can be done effectively.
However, it is worth pointing out that the latest press statements did not contain any mention of ceiling price but it repeatedly insists that the current Automatic Pricing Mechanism is maintained. At the time of writing, RON95 petrol is currently priced at RM1.48/litre while RON97 petrol is priced at RM1.78/litre. Meanwhile, diesel is priced at RM1.63/litre. Since mid-April, petrol prices have dropped significantly to as low as RM1.25/litre for RON95 and RM1.55/litre for RON97. The low pricing was maintained for 5 weeks before it started to increase on a weekly basis.