Petrol Dealers Association president Khairul Annuar Abdul Aziz said oil companies will have to pay the government if fuel prices fall below a minimum level.

“With the ceiling price, the government will pay the difference to oil companies. And with floor price, the government will be able to collect the difference,” he told FMT.

He said petrol dealers welcome the move to cap the price of diesel and RON95 as prices were expected to surge from this week onwards.

Earlier today, the finance ministry set the ceiling price for RON95 at RM2.05 per litre and at RM2.15 per litre.

Khairul said the subsidy would allow consumers to pump the same amount of fuel as before, thus preventing any loss of revenue to the dealers.

“We earn from every litre of fuel sold. If the prices had gone higher, consumers would have purchased less fuel. With higher prices, we would also need more capital to buy fuel, causing a burden to us” he added.

Khairul said dealers have been affected by the current movement control order restrictions but not as badly as last year. “In 2020, dealers were losing up to 80% of their earnings but started to make some recovery from November onwards,” he added.

This year, he said their earnings have dipped by 50% and are just waiting for the MCO to be over.