Friday June 6, 2008

Shahrir: Why now and not in August

KUALA LUMPUR: The decision to expedite the announcement of the increase in petrol and diesel prices was not an “afterthought”, but rather a need, said Domestic Trade and Consumer Affairs Minister Datuk Shahrir Abdul Samad.

Admitting that the ministry had assured consumers recently that there would be no increase in fuel prices at least until August, Shahrir explained that the Government could no longer delay the decision.

“After much discussion with the Cabinet and the Anti-Inflation Committee we decided that it was best to make the announcement on Wednesday in light of the rapid global increase in oil prices.

“If we had waited longer, there would have been a possibility of a different price increase,” he said during a special live programme on RTM which was also attended by Bernama general manager Datuk Azman Ujang and Agenda Daily editor Hanafiah Man.

In the 40-minute programme, Malaysians could call in or text in their messages and queries.

In justifying the 78 sen per litre increase for petrol, Shahrir said the amount was the second choice.

“It was either 50 sen, 78 sen or RM1. Initially it was RM1, but then we decided that rather than placing it at 50 sen and then increasing it later, we would just stick to a one-off increase.

“Why do something twice when it can be implemented once?” he asked.

Shahrir also described the new subsidy system as one that would have space to improve, develop and change in accordance with current needs and the global market situation.

He said that there would definitely be shortcomings in the new system, and thus it would not be permanent.

He added that it would be reliant on global market prices in all aspects.

“For example if we talk about petrol, with this new system in place, it would fluctuate according to global oil prices.

“If it goes up, our price will go up and vice versa, but what is maintained is still the 30 sen per litre discount on market price,” Shahrir said.

Asked about the lifting of the ban on sale of fuel to foreign vehicles at the country's borders, Shahrir reiterated that the ban was meant to be a temporary measure when it was announced initially.