The weekly petrol and diesel prices fixed by the government will be announced every Wednesday and the prices will come into effect after midnight (on Wednesday).
Domestic Trade, Cooperatives and Consumerism Minister (KPDNKK) Hamzah Zainudin said the first announcement on the new mechanism would be on March 29 and the new prices would be effective March 30.
“However, petrol companies and station operators which want to carry out promotions by giving discounts on the fixed prices can do so after receiving the prior approval of KPDNKK,” he said.
Hamzah made the announcement in a live telecast on fixing weekly petrol and diesel prices over TV1 RTM Wednesday.
He also stressed that all petrol companies, as well as station operators, were required to adhere to the new prices.
“Stern action will be taken against petrol companies and station operators which sell petrol and diesel at prices apart from government fixed prices,” he said.
The government had earlier implemented fixing monthly prices on a managed float system by using the ‘Automatic Pricing Mechanism’ (APM) which was set in 1983.
The fixing of monthly managed float prices began in Dec 2014.
“The APM formula we are using is according to world oil market rates…When we used the monthly managed float, we found the changes or fluctuations of prices were so significant they caused anxieties among consumers and petrol station operators,” he said.
To improve the mechanism, Hamzah said KPDNKK held consultations with petrol companies, petrol station operators, non-governmental organisations and other interested groups.
“Findings of the discussions were later presented to the Cabinet and on Feb 22, it gave KPDNKK the greenlight to carry out the management of managed float prices of petrol and diesel on a weekly basis.
“This means any change to the prices of MOPS (Mean of Platts Singapore) and the foreign exchange rate would be translated more accurately according to global market rates,” he said. – Bernama