BN explains petrol price hike, told Opposition to not mislead public

In a statement today, the ruling party explained that Malaysia’s retail petrol prices are based on refined product, not crude oil, adding that global supply and demand factors may also affect prices at the pump.

Based on the managed float system implemented in Dec 2014 to determine the prices of fuel, the government uses the average price of the refined product for the previous month to determine retail pump prices for the following month.

Malaysia uses the Singapore Means of Platts (MOPS) pricing for petrol and diesel

“While global oil prices had increased in recent months due to an agreement to cut production by oil producing countries - which also benefits Malaysia, the price of refined oil products have increased further due to other reasons," said BN.

The party added, MOPS MOGAS 95 unleaded pricing average price for January 2017 had stabilised in a range of USD$69 to USD$70 per barrel and is materially higher than the average price in December 2016.

“It was widely reported over the past month that oil refineries in South East Asia has enjoyed higher pricing and margins due to an unusually higher than normal number of refineries around the world shutting down due to fires and major maintenance. This has reduced supply and increased the refineries' margins and pricing - hence the higher MOGAS 95 prices," said the political party.

PKR president Datuk Seri Dr Wan Azizah Wan Ismail and DAP lawmaker, Tony Pua has called on the government to explain its decision to increase petrol prices.

They claimed that there is no basis for the hike as the price of the Brent crude oil and the value of Ringgit compared to the US Dollar did not weaken significantly compared to the previous month.

“YB Wan Azizah and YB Tony Pua are advised to better understand the economics and market reality of petrol prices instead of making baseless statements that are untrue - or worse - designed to intentionally mislead and incite Malaysians,” said BN.

Yesterday, the government announced the price of RON95 and RON97 petrol have been increased by 20 sen for the month of February.