Fearing a backlash in the elections year, the Malaysian authorities are putting up in place a mechanism that will allow fuel station operators to offer discounted fuel prices soon.
The mechanism came into place today, and Petronas Dagangan Bhd (PetDag), the owner of the Petronas pump stations in Malaysia, said it will observe the market’s response to the new fuel ceiling price mechanism before seeking approval from the Domestic Trade, Cooperatives and Consumerism Ministry to offer discounted pump prices.
Other players will also be able to compete and offer discounts, but they will all have to apply to the relevant ministry – the Domestic Trade, Cooperatives and Consumerism Ministry – to get the approval.
As of today, Malaysians will get fuel and diesel prices based on a weekly price fixing by the Ministry.
Fuel prices has taken a steep rise in Malaysia since the government decided to remove all subsidies on oil and gas.
There are now fears a sudden spike in inflation, which rose to an eight year high of 4.5%, will put further strains on consumer spending in Malaysia.
Domestic Trade, Cooperatives and Consumer Affairs Minister Datuk Seri Hamzah Zainuddin explained the requisite is necessary for the interest of consumers so they are not surprised by the discounts.
“If they (the petrol companies and station operators) want to carry out promotions, they certainly must have the plans.
“Therefore, they must come to us and inform us. If they do that, we can give approval at any time.
“Once approved, we inform the public that certain companies on a certain date or period are having promotions. We must make sure there are no surprises for consumers,” he said.