Change fuel pricing from USD to ringgit, Putrajaya told

KUALA LUMPUR — Pakatan Harapan today (Oct 13) urged Putrajaya to revamp the formula to determine local fuel prices by switching the reference currency from the US dollar to the ringgit.

This, they said, would protect Malaysians from high fuel prices because of the continuous drop in the value of the ringgit in recent months.

“The formula to determine the actual true and fair price of fuel is the cost of crude oil and its processing to refine it to RON95 added with the guarantee of profit to oil companies,” Mr Rafizi Ramli, who is PKR secretary-general, said in a press conference today.

“Most of the refineries are in Malaysia and most crude oil is sourced from Malaysia. The pricing for all these are in ringgit.

“So fuel prices here should be independent of the fluctuations of the ringgit compared to the US dollar.”

Rafizi, who is also the Pandan MP, said that since the 1980s, the government had been using the price reference from Singapore in the US dollar to determine the prices of crude oil and refining it, when more accurate information could be acquired from Malaysian oil companies.

“The government’s other weakness is its failure to keep the ringgit in check, causing it to fall against the USD.

“So, although fuel prices in USD actually remained low, when it is converted to ringgit using the formula, it becomes expensive because of the currency factor,” he added.

He said the actual price Malaysians should be paying for RON95 fuel was RM1.70 per litre, not the RM2.05 the government has set.

This also includes the 32 sen in guaranteed profit for oil companies, he added. The ringgit has lost 16 per cent this year, making it Asia’s worst-performing currency. According to Bloomberg, the currency weakened 1.1 per cent to 4.1765 a dollar yesterday. THE MALAYSIAN INSIDER