KULIM: The federal government will require more time to decide on the possibilities of lowering the retail fuel price despite the current downward trend of global crude oil price.
Economy minister Rafizi Ramli said the government needed to take into account many factors including the current financial capabilities and allocation for economic activities which have multiplier effects.
"This is beyond the issue on the formula (price setting formula), but more importantly is the current economic situation.
"The question is, the current global crude oil price is hovering between US$83 to US$85 per barrel and some were saying that the crude oil price has dropped over the past four and five months after breaching the US$100 per barrel price level.
"Hence, when the (global crude oil) price has dropped, is it enough for us to lower down the retail fuel price? Of course, for those who understand the oil and gas sector he will be asking the question," Rafizi told reporters after taking part in the Padang Serai parliamentary election rally here last night.
Rafizi, who is also PKR deputy president, said the government would need to study on its current financial capabilities before deciding to review the retail fuel price.
"We need to take a look on the actual government revenue now and if we review the current RM2.05 per litre price (for petrol), how much additional allocation we need to inject?" he said.
The Pandan Member of Parliament added that the government needed to study whether increasing subsidies to bring down the fuel price was worth it, as compared to channelling the allocation for other economic activities with multiplier effects.
"All these require us more time to study each and every aspect, because when we joined any new organisation or administration either in the government or a company, we don't just step in and remove everything.
"We have a direction, but we need to study whatever we have in hand first, which are the good ones and which that should be fixed. We need to focus on matters that we need to do away with, introduce new approaches so of course, all these will be time consuming.
"It is dangerous if all ministers, after the first 24 hours (of being sworn in) announced this and that, that is equivalent to a recipe of disaster.
"As such, I think we need to take one step at a time because this is not something like managing your own company but we are managing the economy," he said.
Commenting further, Rafizi said his formula in deciding the fuel retail price adopted by the government several years back, was still relevant to be retained.
He said the formula should be maintained for the time being because it took into account changes in global crude oil prices as well as the suitable retail ceiling price for fuel.
Rafizi was asked whether the new federal administration was planning to lower the retail fuel price after assuming power.
Currently, the retail price for RON 95 petrol and diesel is fixed at RM2.05 and RM2.15 respectively.
For record, the government is subsidising RON 95 petrol, diesel, and liquefied petroleum gas (LPG).
It was reported earlier that the then Finance Minister Tengku Datuk Seri Zafrul Tengku Abdul Aziz had estimated the subsidy alone was going to cost the government as much as RM28 billion in 2022.
The price of Malaysia's subsidised petrol (RON 95) made it the most affordable among nine of the Association of Southeast Asian Nations (Asean) member countries listed.
As for early this month, the petrol price in Malaysia is 47.44 per cent less than that of Indonesia (RM3.90) and 54.24 per cent less than that of Vietnam (RM4.48).