For the past two months, the rakyat has been buying petrol at different prices every week.
Every Wednesday, the rakyat would wait and see whether new fuel prices will go up or down.
As an example, this week the petrol prices could go up.
And next week, petrol prices can come down.
This is called the weekly fuel pricing mechanism.
How has it affected the rakyat so far?
What sort of benefits can we see?
Let us take a look.
What is weekly fuel pricing mechanism?
The reason why fuel prices is going up and down every week is because our fuel price is based on the world crude oil prices.
If crude oil price in the international market is high at US$60 per barrel, our fuel price will also increase.
If crude oil price drops at US$40 per barrel, our fuel price will also go down.
And crude oil prices per barrel will change all the time based on world supply and demand situation.
Called the weekly fuel pricing mechanism, our fuel price is adjusted every week according to world oil prices.
Why is the government implementing the weekly fuel pricing mechanism?
The government is impelenting the weekly fuel price mechanism because it can no longer subsidise the oil for the rakyat.
The government has to pay billions of ringgit every year in fuel subsidies to the rakyat.
This subsidy is not sustainable as the governmet cannot subsidise oil for the rakyat forever.
So that is why the government introduced the weekly fuel price mechanism in April this year.
And now the rakyat has to pay for their petrol according to world crude oil prices.
How has the rakyat adjusted so far?
Sunway Business School Professor of Economics Dr Yeah Kim Leng said for the past two months, the rakyat has adjusted well with the weekly fuel price mechanism.
He said the rakyat now are used to the changing fuel price and expect it every week.
The best part is that the changes in oil prices are small and not big and drastic.
If the oil price increase is huge, such as 50 sen, it would be a problem for the rakyat.
But the oil price increase only involve a few sen and this is well received by the rakyat.
A few sen increase will not be a burden to the rakyat.
No more long queues
The best part about the weekly fuel mechanism is that the long queues are gone.
Previously, there will be long queues at petrol stations whenever there is a fuel increase after midnight.
Now, the rakyat will wait to fill up petrol the next day.
This is some of the best points of the weekly fuel mechanism.
Adjust oil price daily?
To make it better for the rakyat, perhaps fuel prices can be adjusted daily?
Dr Yeah said when fuel prices are adjusted daily, the increase or decrease will be gradual and stable.
In that way, the rakyat will not feel the increase as too drastic.
The rakyat will then be able to better prepare and strategise on how to spend on petrol.
How does the rakyat feel?
Sazrul Yaakob a technician at Astro said almost everybody are positive of the weekly fuel price mechanism.
“The price increase is not big, so it will not be a burden for me,” said Sazrul.
Despatch rider Sahari Asri said motorcylists like him as well as his friends in Kuala Lumpur are happy as long as petrol price increase are not that high and manageable.
“For riders like me who travels everyday, fuel prices right now are okay..not too high and not too low.”
So the weekly price mechanism has been successful in managing fuel price increase and decrease.
The rakyat us happy but the oil companies are sad
Although the rakyat are happy with the current low price of oil, the oil companies such as Shell, Petronas and Petron however are not.
This is because oil prices are now getting cheaper and cheaper and affecting their business.
Domestic Trade, Cooperatives and Consumerism Minister Datuk Seri Hamzah Zainuddin told the media on June 7 that it will meet petrol companies and dealers to address the negative impact on the industry.
Let’s hope that an amicable solution can be found to benefit both the oil companies and the rakyat.