Why Petrol Prices Go Up But Not Down in Malaysia?!

A media report in July stated that the price of petrol (RON97) would be floated. This however, has not materialize in reality.

Today (10 February 2009), Domestic Trade and Consumer Affairs Minister Datuk Shahrir Abdul Samad said that ‘is it premature for them to say that.’ Furthermore, he commented that the media report was a story from a dealer who may not understand what is being said.

Datuk Shahrir also said that various elements must be taken into consideration before the pricing strategy was to be set. These elements include the price of the product, industry margins and goverment duty.

While I agree with the ‘various elements’ being taken into consideration, I find it ironic that the policy makers have taken so long to formulate a solution to the problem.

International oil prices have fallen from their peaks of US$147 per barrel to less than US$35 per barrel. As international prices of oil plummets, the burden of government subsidies on petrol disappears.

Indeed, if we were to compare the prices of petrol of lets say the United States or China, we may realize that Malaysians are actually paying more for the same quantity of petrol after taking into account currency exchange rates in comparison.

Therefore, instead of subsidies, we Malaysians are being indirectly taxed whenever we fill up our car’s belly!

I hope policy makers will respond faster to this issue.

A report on petrol prices can be found here:

Impact of High Oil Prices on the Malaysian Economy

Price Controls: Part of the problem or part of the solution?

Facts – BBC

  • Full name: Federation of Malaysia
  • Population: 27 million (UN, 2008)
  • Capital: Kuala Lumpur
  • Area: 329,847 sq km (127,355 sq miles)
  • Major languages: Malay (official), English, Chinese dialects, Tamil, Telugu, Malayalam
  • Major religions: Islam, Buddhism, Taoism, Hinduism, Christianity, Sikhism
  • Life expectancy: 72 years (men), 77 years (women)
  • Monetary unit: 1 ringgit = 100 sen
  • Main exports: Electronic equipment, petroleum and liquefied natural gas, chemicals, palm oil, wood and wood products, rubber, textiles
  • GNI per capita: US $6,540 (World Bank, 2007)
  • Internet domain: .my
  • International dialling code: +60



One Response to “Why Petrol Prices Go Up But Not Down in Malaysia?!”
  1. Jia_Zhing says:

    I suppose not to say bad things of our government, but I truly think that our government is actually making lot of profit by selling the petrol price high. If I’m not mistaken, average petrol selling price should be RM 1.5 a litter, however, the government is selling at RM 1.8. Where the rest of money gone? We all know very well….

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