Focus View
Daily petrol pricing may be the answer
FocusM team | 19 May 2017 00:30
THE weekly fuel price system effective March 30 has not gone down well with petrol dealers. They claim oil companies are offloading supplies before prices go down and hold back supply in anticipation of a price increase.

However, Shell Malaysia Trading Sdn Bhd has refuted such claims. It stressed it does not take advantage of its “business partners” and explained oil companies themselves are notified of the new prices only hours before they become effective every Thursday.

The Petrol Dealers Association of Malaysia (PDAM) asserts that a 10-sen drop in petrol price will wipe out their margins. It wants a five-sen limit to weekly fuel price changes to cushion the impact on members.

While we can understand the PDAM’s plight, fixing a limit means consumers will be short-changed if the price reduction should be more than five sen. Why deprive them of more savings?

When petrol dealers agreed to a weekly pricing mechanism, they probably didn’t anticipate the current problems that came with a shorter pricing period. The Ministry of Domestic Trade, Cooperatives and Consumerism reportedly will hold a meeting with them to discuss the impact of the weekly petrol pricing system.

There is no question of reverting to a monthly pricing system either. It will mean the issue of huge price fluctuations will not be resolved as the change in prices may be even greater. For example, the final six months of the monthly pricing era saw changes of between 10 and 20 sen monthly.

Since the weekly pricing started, RON 95 and RON 97 prices have changed by between seven and 11 sen. On May 18, the price of RON 95 and RON 97 went up by seven and eight sen, respectively, after falling for three consecutive weeks.

Perhaps the answer lies in changing the pricing system from a weekly to daily basis. In that way, the price fluctuations will be minimal. Dealers and consumers will get a fairer deal too. Many countries have adopted a daily system and it has worked well for oil companies, their dealers and consumers.

Just like how all stakeholders got used to a weekly pricing system from a monthly one, it is just a matter of adjusting to a daily system.