Saturday, August 23, 2008

Malaysia using Floating price mechanism for Fuel price

People are quick to react especially when it comes to cost-savings, which is a wise move, of course. Notice the almost empty gas station? This is a picture from The Star papers showing a petrol station in Petaling Jaya. Customers delayed refuelling their vehicles during the few hours before the price reduction came into effect. I refuelled on Wednesday night so I was not caught in this little shindig. Let me see, how much would I have where's my calculator? LOL!

The price of fuel reduced 15sen at midnight last night, from RM2.70 after a 78sen increase on June 4. RON97 now costs RM2.55 a litre while RON92 is now at RM2.40 a litre.

The Prime Ministrer, Datuk Seri Abdullah Ahmad Badawi, said in a statement yesterday the Cabinet decided to bring forward the “floating” price mechanism for fuel after considering the drop in global oil prices over the past few weeks as well as higher inflation in July.

The new prices were set after considering fuel prices between Aug 1 and Aug 21, and in view of the Government’s decision to set the subsidy at 30 sen a litre for RON97 and RON92, and 50 sen a litre for diesel. The PM assured the people that the petrol price would not exceed RM2.70 a litre for this year, even if the global market price went up. Did you catch the "for this year"? hmm... But then again, fuel price increase is going to be a part of our life, so brace yourself!
Abdullah (the PM) also expects the prices of goods to fall. But will they? I do not mean to be negative but as far as I can remember, there has never been an occasion where prices fall. Tell me I am wrong.

The people of Permatang Pauh are heading to vote in a by-election. Nothing extraordinary, of course, unless the opposition party candidate is former Deputy Prime Minister, Anwar Ibrahim. Malaysians probably have this event or Anwar to thank for for this petrol reduction sooner than later.


  1. spot on! well, im looking for more goodies like the efficient transport system as well :)

  2. In the U.S., the gas(oline) price differs from one city to another, and from one company to the other. This is the real floating price mechanism.

  3. QC, which transport system are you referring to? I know that the LRT (both Star and Putra) are very efficient. The Monorail too except that we get hiccups like burst tyres - which happened the other day. I get it. It must be our taxi servicce. This one needs some serious monitoring and probably revamping.

  4. KS, lol! Malaysia is so tiny compared to the US so having different floating prices for individual states may not make sense. No?

  5. hi happy surfer

    i think our inter city bus service is very good.

    and overall, yes, its good we have lrt, which so far has a decently good network in kl.

    but i would also like:

    1. a better network of lrt around the expanding kl & pj especially.
    2. a good interchange station (that gives commuters shade).
    3. better connection of buses from lrt stops.
    4. faster transport system between states (yes, the kl-ipoh train is a good start).

    im not saying our transportation system is bad, but i think we can still improve. :)

  6. QC, certainly all valid points you brought up. I guess I missed all these because I hardly use public transportation to be able to see the gaps, but I do agree that there is still a lot of room for improvement like the things you pointed out. Great observation!

  7. Anwar said if he becomes PM, he would reduce petrol price to RM2 per liter. That would certainly burn a huge hole in the govt budget :p

  8. MB, did he say that? Really? He has my vote! LOL!

    There must be more to it than meets the eye. His is a macro view and only time will tell. Sit back and enjoy the show, my Singapore neighbour.

  9. ahaha, Sinagpore price has gone down to S$1.896.

    still more ex than Malaysia, I guess

  10. No lah, apple to apple, ours is more expensive at RM2.55 wor.