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KUALA LUMPUR, July 1, 2015:

Many pundits are puzzled as to why RON95 petrol price was raised 10 sen per litre as of today when prevailing global crude oil prices are down slightly compared to a month earlier.

As an indication as to just how much global oil prices have trended downwards, Reuters reported today that the official selling price of a basket of Malaysian crude oil for June-loading has been calculated at US$66.89 (RM251.90) a barrel, down US$2.48 from the previous month.

The government has yet to disclose exactly how the monthly market price float formula applied for to fuel pump pricing is calculated, but previous reports indicate that it is partly derived from pricing set by Petronas on a monthly basis.

Petronas introduced the new benchmark starting January 2014, based on the spot differentials to dated Brent for three grades – Labuan, Miri and Kikeh.

As a result of the change, Tapis Blend was dropped as the key pricing reference to dated Brent due to low liquidity and falling output. Kimanis, a new grade that started production in the fourth quarter of 2014, could be included in the price reference basket in late-2015 or 2016.

It is also puzzling as to why RON97 pricing was raised 20 sen per litre, though some attribute it to upward rounding related to the Goods and Sales Tax.

Diesel price being maintained is also seen as temporary ahead of the Hari Raya Puasa period to ensure foodstuff delivery and bus ticket prices don’t get raised this month – and is likely to go up in August to be level with RON95 petrol once more then.

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