KUALA LUMPUR: A Singapore investment bank believes that the new weekly price ceiling for fuel, which will come into effect next month, is an indicator of a coming general election.
UOB Kay Hian (UOBKH), in an analyst report, believed that the Government having a weekly price ceiling and allowing retailers to set their price at their stations could spark a price war, which would benefit consumers and big retailers like Petronas Dagangan Bhd.
It is also a likely “pre-election move”, said UOBKH.
“It effectively shifts the Government’s burden of potentially imposing more fuel subsidies to the relevant industry players by way of competition.
“If we assume the relevant components in the pricing mechanism will no longer be fixed, but subject to the overall price ceiling, the ultimate beneficiaries are the consumers,” it said.
The onus of setting fuel prices would be shifted to the petrol stations, which would now have to outdo each other by setting more attractive prices to bring in customers.
Domestic Trade, Cooperatives and Consumerism Minister Datuk Hamzah Zainuddin announced recently that the Government would set a new ceiling price for fuel every week, starting April 17.
The Malaysian Competition Commission commissioner Datuk Gan Khan Poh said the move to create a ceiling price for petrol was a commendable step in a competitive market.
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