In a statement yesterday, the finance ministry said the government would identify “appropriate measures” to reduce the impact of fuel price hikes if the retail price of RON95 and diesel exceeded RM2.50 per litre continuously for three months.

The measures, it said, would not burden the people, and would also ensure that the inflation rate was under control in the short and medium-term.

RON95 petrol is being sold at RM2.38 per litre, up seven sen from last week. Diesel price rose by five sen to RM2.25 per litre.

“The government is concerned and understands the impact following the rise of global crude oil prices that are presently more than US$60 (RM250) per barrel.

“Currently, the government has implemented a rationalisation step towards subsidising petroleum products in line with the trend of rising or decreasing world crude oil prices.

“This measure has been successful in reducing leakage and ensuring targeted subsidies,” the ministry said.

The government now fixes retail fuel prices on a weekly basis, calculated using an automatic pricing mechanism.

“The current mechanism in place is on a weekly basis where the average change in the cost of petroleum products the previous week will determine the price for the following week.

“If world crude oil prices rise then retail prices of petroleum products also rise; the retail price will drop if world crude prices drop.

“However, the government is still subsidising the public transport sector and fishermen, as well as cooking gas,” the ministry added.

Brent crude oil is currently priced at US$62.31.