‘Fuel subsidy will serve as buffer against inflation’


PETALING JAYA: The government’s decision to subsidise the prices of petrol and diesel at almost 30 sen will bring several benefits.

According to Petrol Dealers Association of Malaysia (PDAM) president Datuk Khairul Annuar Abdul Aziz, it will lift the burden of high fuel prices off the shoulders of consumers.

“It can also protect them against inflation that can be triggered by increases in fuel prices,” he said in welcoming the move.

However, the Federation of Malaysian Consumers Associations (Fomca), while also lauding the decision, cautioned that the ceiling price could change in future.

Khairul Annuar told theSun that in terms of helping consumers, this initiative would benefit and protect them from further price increases beyond the ceiling price.

Prime Minister Tan Sri Muhyiddin Yassin announced on Wednesday that the government had set the ceiling prices of RON95 petrol and diesel at RM2.05 and RM2.15 respectively in order to shield consumers from the impact of fuel price increases.

In regard to the effects of the subsidy to the petrol business, Khairul Annuar said it would bring more positives than negatives.

“It brings positives to us. For instance, merchant discount rates (credit card charges that we absorb on behalf of customers) will not be too high as it is calculated at about 1% of retail fuel price,” he said.

Fomca chief executive officer Saravanan Thambirajah said any increase in the ceiling price would still have an impact on consumers.

“Consumers should be prepared as any future increase in the price of RON95 petrol and diesel will have a domino effect on all sectors.”

“If this happens, there will be a negative impact on public transportation, the manufacturing sector and the food industry as 95% of the public use RON95. Any increase in fuel price will not guarantee prices of essential goods and the cost of living will remain as most traders are profit-oriented and will take advantage of the situation.”

He expressed hope that the Domestic Trade and Consumer Affairs Ministry will enforce and monitor prices of essential items, especially in rural areas.

“Any future increase in fuel price will have an impact on the rice bowls of the people, particularly those in the B40 group. While we are glad that the government has decided on the 30-sen subsidy, we hope there will not be any increase in the near future,” he added.



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