A chart that surfaced online alleged that since the Malaysian government removed the subsidy for petrol, Malaysian are the ones ‘subsidising’ the government instead. True or not, up to you to decide.

Since December 2014, Malaysia has removed the fuel subsidy that Malaysians have been enjoying for decades, and in it’s place a ‘managed float system’ that updates the RON-95, RON-97 and diesel prices on a monthly basis.

As fuel prices have been on a downward trend for the past year, Malaysians have not felt the pinch, and have even enjoyed a period of low fuel prices earlier this year.

However, the article has alleged that the government has not been able to explain the formula behind the pricing system, or the mechanism that was used to determine oil prices; instead Malaysians are told that the prices are based on the performance of global oil prices from the previous month.



The article also took jabs at the Najib administration over his recent scandal, and complains that despite enjoying even lower oil prices, Malaysian are feeling the pinch as prices of everything else has since increased.

The chart above compared global crude oil prices with local petrol price set by the managed float system, and clearly shows a significant and growing gap between the two, Malaysian oil prices being higher that it should.

A quick search on the global oil price has revealed that the chart’s prices have been pretty accurate, and on the surface it seems that their allegation is right on spot.

However, one must not forget crude oil basically means unrefined petroleum, and is just part of the metric that determines consumer petrol prices. Cost of tax, refinement and more also had to be factored in before the final price is determined. An article from Telegraph has a very good explanation regarding this matter.

However it is also suspicious that the gap between crude oil and the final petroleum price to have such a big gap, but without a clear explanation of how the managed floating system arrive at the final price, we will not be able to know for sure.

http://thecoverage.my/opinion/chart-shows-...-paying-petrol/