Former Pandan MP Rafizi Ramli today urged Putrajaya to return to the weekly managed float system for fuel – as practised under the BN administration – given the falling price of crude oil.

In a letter addressed to Finance Minister Lim Guan Eng, he said that this would enable the people to make instant savings and protect them from volatile fuel prices.

Lim stated today that Putrajaya now uses the monthly average price of Brent crude to determine how much it has to subsidise to maintain the ceiling price of RM2.20 per litre for RON95.

As Rafizi pointed out, however, this method is more suited to high oil prices.

“I understand that this method was suitable for the past few months, when global crude oil prices skyrocketed. When the price of crude oil is high, the federal government prepares subsidies to keep the price at RM2.20 per litre for RON95.

“As long as the price of crude oil remains high, therefore the calculation of the formula is only to determine the subsidies borne by the federal government, because the price paid by the people is lower than the formula,” he said.

But with Brent crude now lingering around the US$53 per barrel mark, from around US$73 when Harapan assumed federal power in May, Rafizi suggested a return to the weekly managed float system introduced by the previous BN administration in 2014.

“The people are already used to the weekly calculation, such as that left by the administration of former prime minister Najib Abdul Razak… Besides, the people do not even know that the federal government is now using the monthly formula.

“To ensure that the price of fuel paid by the people reflects the current market, I appeal to the federal government to consider adjusting the price based on the weekly formula.

“This will enable a reduction of 20 sen for RON95 over the next few weeks,” his letter read.

According to Rafizi, if the Automated Pricing Mechanism (APM) formula was used for weekly-adjusted oil prices, the fuel prices for the three weeks of December thus far would be between RM1.93 and RM1.95.

The price difference was also highlighted by Najib yesterday, who accused the Pakatan Harapan government of imposing a 30 sen per litre “fuel tax” on the people since November.

Earlier today, Lim said that the 2019 Budget will be recalibrated if the average price of Brent crude falls below the US$50 per barrel mark.

"Previously, when oil prices rose from US$52 per barrel to US$72, we did not recalibrate the budget, so similarly it has gone down from US$72 per barrel to US$52 now. We will only consider recalibrating the budget if average crude oil price dips below US$50 per barrel,” the finance minister said.

The Harapan administration has maintained the price of RON95 at RM2.20 per litre since assuming federal power in May.

The last time the price of RON95 was changed was on March 22, during the weekly managed float system utilised by the BN administration.

The system had been in place since December 2014 following the withdrawal of government subsidies, but prices were frozen in the weeks leading up to the 14th general election.

At the time, the price of crude oil was at around US$69 per barrel. Currently, the price of crude oil is at US$53.82 per barrel.