Sell Fuel Below Stipulated Price, Says Minister To Petrol Stations

by Jacie Tan

Personal Finance News

Sell Fuel Below Stipulated Price, Says Minister To Petrol Stations(Image: Malay Mail)

Petroleum companies can sell fuel below the government’s stipulated price if they want to compete with one another, said Domestic Trade and Consumer Affairs Minister Datuk Seri Saifuddin Nasution Ismail.

"If it is implemented, we can see petrol stations selling at different prices," said Saifuddin. "For instance, if Shell is selling at RM2.06, Petron RM2.07, then go to BHP which is retailing at RM2.04."

Saifuddin said that currently, all 3,500 petrol stations from the six main industry players sell their petroleum products according to the government’s automatic pricing mechanism, which is RM2.08 per litre for RON95 petrol. However, if the companies were to "practise the principle of competition through innovation and efficiency, they could reduce the retail price of petroleum products."

"Petrol retailing business is a business of volume, not margin – which means competition among station operators can take place," said Saifuddin. "How much to be reduced depends on the operator as they need to make comparison in terms of costs and quality of service offered."

According to Saifuddin, the government has taken the importance of petrol station operators into account by increasing their margin by 2.81 sen per litre to 15 sen per litre for petrol, and by 3.0 sen per litre to 10 sen per litre for diesel. He added that the government would be prepared to provide support, including certain benefits, for petroleum companies who wished to reduce their prices.

(Source: The Edge Markets