'Diesel costlier to produce'

PETALING JAYA: The Government fixed the price of diesel three sen higher – despite a drop in world oil prices – because of its higher production cost, said Datuk Seri Hasan Malek.

“The cost to produce diesel is higher than that for RON95. That is why there is a difference in price of the two fuels,” said the Domestic Trade, Cooperatives and Consumerism Minister.

He further explained that the price of diesel for the month of December was determined based on the average cost of diesel throughout last month until Nov 27.

“If there are changes to the price of crude oil, it will be adjusted at the fuel pump the following month,” said Hasan.

Under the Government’s managed float system, the December prices of RON97 and RON95 petrol dropped by nine sen and four sen per litre, to RM2.46 and RM2.26, respectively. The price of diesel, however, rose by three sen to RM2.23 per litre, confounding consumers.

Earlier in Kampar, Hasan said the Government was unable to lower the price of diesel because the fuel had been heavily subsidised. However, he said the three-sen increase in its price was not a method to recover the losses incurred by the Government.

When asked how public transport operators were supposed to set their charges with fluctuating fuel prices, Hasan said the matter would be reviewed.

Pan–Malaysia Lorry Owners’ Association president Jong Foh Jit said his members were disappointed with the diesel price rise.

Related story:

RON97 'out of stock' in places