If you were ready for a slight reprieve in how much you’d have to pay at the fuel station the coming week, you would have likely been disappointed after the fuel price announcement earlier this evening. Global crude oil prices have gone down, yet the weekly retail prices in Malaysia went up.
This contradiction will likely leave many Malaysians confused, but the Ministry of Finance (MOF) has released an infographic breaking down the key factors behind this week’s price adjustments.
The first takeaway from the MOF’s announcement is time lag. The weekly pump price isn’t a direct reflection of today’s spot market price for crude oil. The MOF states that the pump price is determined based on the average of the previous week’s prices.
This means that while global prices are dipping now, our pump price was calculated from the averages of last week, which was still in an uptrend. We are, essentially, paying for the higher average of the past, not the lower price of the present.
The second factor is the commercial reality of a long supply chain. The fuel in the pumps at your local station was not bought on the spot market that very day. The MOF clarified that the current supply being sold was, in fact, purchased when prices were higher.
The MOF provided a specific five-week context, noting that global oil prices had surged prior to this recent dip. This surge didn’t just affect the cost of crude; it also cascaded through the supply chain, increasing costs for essential services like logistics and insurance.
The MOF noted that current retail prices are still reflecting the high-cost inventories of previous supplies. These stocks were purchased at approximately US$150 per barrel forpetrol and US$250 per barrel for diesel. This high-cost inventory must be cleared before the benefit of current lower global prices can be passed on.
We are essentially paying a delayed bill, until the system completes the cycle of using up the previously expensive stock and averaging new lower prices.
So what can we do? Drivers should manage their expectations for an immediate drop. The lower global crude prices seen now will, if they remain low, be factored into the next weekly calculation. We might see a downward adjustment next week, if this week’s average allows it.
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Just import diesel from Borneo. I heard over there is cheaper.
Many rakyat marhaen ride motorbikes that run on petrol & so they don’t care much about diesel.
Instead of supporting rakyat by lowering petrol prices this fake Gomen is backing the rich petrol dealers and taikuns by increasing prices. This fake gomen is for the rich.
Why complain. RM 1.99 is always cheaper than in other countries.
Biasalah! Kalau naik on the spot ” We have to follow the current price”, Kalau turun ” Macam- macam alasan”
All sorts of excuses. Price goes up fast, come down excuses as usual.
Buat je harga harian…tak payah nak umum seminggu sekali ,kenapa susahkan diri benda boleh mudah.
Expectations free fall fuel pricing by next week KEK
not happening, the cunning jews will launch new attack within days
Please explain why a litre of low grade diesel can be so much more expensive than a litre of pure RON95 petrol !! This does not adds up. I have a feeling that we in WM are sponsoring people in EM ! Govt better do something wise instead of robbing our money and pass it to EM.
.. approximately twice as much petrol can be extracted, as compared to diesel fuel. That is why the price of petrol does not increase as fast as that of diesel when crude oil prices rise.
Diesel is not lower grade than petrol. The difference is in the way each type of fuel ignites in the combustion chamber..
I accept the rationale except the 5 weeks average. MOF = Ministry of Fools. Not them but us, The Rakyat for being fooled. 5 weeks average may be used to calculate the lowering of prices but uptick is immediate. What? 5 days average?
5 weeks is the estimated time taken by an oil tanker to sail from the Middle East to Malaysia.
Anyway, price goes up gets adjusted asap… price goes down, happen in our dreams — always have plenty of reasons why it won’t or never come back down. Same same every time and across anything la. Just check, has our teh tarik price comes down over the years?
Masa naik, old stock purchase low sell high
Masa turun, old stock purchase high sell high
Mechanism: old stock need to be sell at purchase price. If world oil price naik, those old stock my be sold at purchase margin
actually most malaysians who are already eligible to buy ron95 at a fixed rm1.99 a litre are not too bothered.
Exactly. Running like touts
Gomen style is like that. When you do business even if you are in losses you still pay taxes (licences etc) and collect sst tax for them for free. Rakyat always the fool that always loses. The house always wins.
Alasan seperti BN
TALK SH*T
Just be thankful that in Malaysia, you are not in long queues to fill up your tank or to refill your cooking gas (LPG) cylinders due to supply shortages, as that is the real DEEP SH*T being experienced by people in other countries..
So if price fall face a time lag due to long supply chain, why price go up don’t face the same but go up immediately?? Please explain.