He pointed out that any move to narrow the price gap too hastily could lead to a significant increase in the prices of goods, and that could set off hyperinflation.

“Instead, the government should wait until the (market) price is almost the same as the pump price. Then, there will be no big jump, no inflation and it will be easier to implement,” he told FMT Business.

Khairul noted that the finance ministry had capped the price of RON95 at RM2.05 per litre and diesel at RM2.15 per litre to shield consumers from the impact of global oil price increases although the market price for both items had breached the ceiling.

On the implementation of targeted subsidies, he pointed out that the operators of mini petrol stations in rural areas had not been consulted.

He said that while e-wallets were required to pay for fuel under the targeted subsidy pilot programme, the rural folks did not have easy access to the facility.

“The pilot programme has been implemented in urban centres such as Putrajaya. I hope the ministry reaches out to the rural folks because what they are doing now (using e-wallets) won’t work,” he added.

He claimed that the mini petrol stations would lose out as their customers, who were mainly from the B40 group, would be forced to go to the major petrol stations that had better network coverage. “In extreme cases, these stations may be forced to shut down,” he added.

Khairul said the government should discuss the weekly or monthly pricing mechanism with dealers before making an announcement because price changes had an impact on business.

“We buy fuel at a certain price and if we still have stock when the price drops, it becomes a nightmare for us,” he said.

He said the government should also take into consideration the interests of petrol dealers, consumers and oil companies when deciding on targeted subsidies or the ceiling price of fuel.

“Perhaps the government should set the pump price close to the actual market price. Otherwise, it would burden the whole industry again,” he said.

Khairul said that when fuel prices skyrocketed due to the Ukraine-Russia conflict, dealers were burdened with high costs and had to increase working capital.

He said the government could help by changing the price mechanism so that dealers drew a percentage of the pump price as profit rather than by the litre.