Call for the government to reintroduce subsidy for RON 95 to prevent RON95 price exceeding RM2.30, the psychological price point in Nov 2014 before government introduce the manage float system for petrol prices.

Malaysians may have to pay more than RM2.30 by midnight today due to the rising global oil price. The Brent Crude Oil price have risen for 14.65% over the past month from USD55.62 to USD63.77.

When the government introduced the mange float system for Petrol prices in Nov 2014, RON95 price is at RM2.30. Since then, RON95 price has never hit above the psychological price point of RM2.30.

I call on the government to reintroduce petrol subsidy for RON95 especially for the B40 group as the poor will be hit the most in the scenario of a petrol price driven inflation.

In a report three days ago, Bloomberg reported that OPEC is eyeing a USD70 crude oil price. Should the crude oil price hit USD70, Malaysia as an oil producing country will be able to collect more profits from the sale of oil.

Will Putrajaya use the additional profits from the rising oil price to subsidise petrol? If not, Putrajaya need to explain to Malaysians where does the additional profits from the rising oil prices go?

Pakatan Harapan has already pledged to reintroduce petrol subsidy for the B40 group if we win federal power. Will BN follow suit?

Media Statement by Chong Zhemin DAP Perak Economic Development Bureau Chief and Political Secretary to MP Taping on the 8 Novermber 2017

Has Putrajaya been quietly collecting hidden fuel tax which has cause inflation to be the highest in eight years. Call for Putrajaya to reveal and make public the formula and calculation for the weekly fuel price.

Malaysians are shocked to find out that this week fuel price will see its third consecutive increase. RON 95 has been hike 3 cents and RON 97 will go up 2 cents.

The world crude oil price in the past week has go down by a dollar and the Ringgit has strengthened marginally against the dollar. The government must explain on what basis it has hike the fuel price once again.

According to a report by Reuters, March inflation has hit an eight-year high at 5.1%. Has Putrajaya been quietly collecting hidden fuel tax which has cause the inflation to shoot up in recent months?

When Putrajaya abolish the fuel subsidy in November 2014, RON 95 was retailing at RM2.27. The price for RON 95 has gone down since then due to the fall in world crude oil price.

When Government implemented GST in April 2015, RON 95 was priced at RM1.90 per litre, which is lower compare to today’s price. It is not a surprise that Inflation in March has shoot up to 5.1% since the price of RON 95 has gone up to the price of pre abolishment of fuel subsidy and GST has been implemented now.

Government has collected an additional RM 18 Billion under GST compare to SST. The government has also saved an estimated RM20 Billion annually since the abolishment of fuel subsidy.

Malaysians have to bear the burden of this total of RM 38 Billion in tax collection and subsidy saving by the government.

I call on Putrajaya be transparent and immediately release the formula and calculation for the weekly fuel price to prove that it has not been quietly collecting hidden fuel tax from the rakyat.

Media Statement by Chong Zhemin, DAP Perak Economic Developement Bureau Chief and Political Secretary to Taiping MP on 19 April 2017

Putrajaya must also scrap sales tax, import duty and excise duty on cars after abolishing fuel subsidies in total

I cautiously welcome the announcement by Domestic Trade, Cooperative and Consumerism Minister Hasan Malek to regulate RON95 and diesel prices on a manage float system. With the current crude oil slump, this could potentially translate into lower fuel prices for Malaysians.

I urge Putrajaya to be transparent on the method of calculation of the market price for RON95 and diesel. I have previously quoted the AmResearch report in my statement on the 17 October that the breakeven of the global crude oil price is at an average of USD84.80 per barrel if RON95 remains at RM2.30 per litre without government subsidy. However on the 6 November, Deputy Finance Minister Ahmad Maslan claimed that the government is still subsidising 12 cent per litre for RON95 when the global crude oil price is at USD83.46.

This shows inconsistencies between Putrajaya’s claim and the AmResearch report. Putrajaya must be transparent and immediately disclose their calculation methodology of market prices for RON95 and diesel.

Due to the volatility of the global crude oil price, Putrajaya must adjust the prices of fuel every fortnight timely. Gobal crude oil has plunged for almost 20% since early September but Putrajaya has only adjusted the prices of RON97 two days ago.

The AmResearch report also estimated that a 10% reduction in global oil price could potentially save the government subsidies amounting to RM35.6 billion. With global crude oil plunged more than 20%, Putrajaya could potentially record a saving of RM71.2 billion in fuel subsidies.

In Budget 2015 Putrajaya has estimated to collect a total of RM17.3 billion of transport related taxes in the form of excise duty(RM8 billion), car sales tax(RM4.5 billion), import duty(RM1.1 billion) and vehicle licenses(RM2.4 billion).

With the scrapping of fuel subsidy in total, Putrajaya must also abolish all transport related taxes – excise duty, car sales tax and import duty. It is not fair for Putrajaya to scrap fuel subsidies and at the same time maintain the transport related taxes. Malaysians deserve to buy cheaper cars as we now no longer enjoy any fuel subsidy.

Media Statement by Chong Zhemin, DAP Perak Economic Development Bureau Chief and Political Secretary to the Taiping MP on 21 Nov 2014

Is Ahmad Maslan suffering from cognitive dissonance that he has no qualms raising petrol prices when global oil prices rise but refuse to reduce petrol price when global oil prices plummet?

Deputy Finance Minister Ahmad Maslan has said that the issue of reducing oil prices in tandem with plummeting global crude oil prices “does not arise” as the government is still subsidising RON 95 petrol and diesel prices in the country.

Ahmad Maslan poor self-justification on the decision not to reduce petrol prices contradicts Putrajaya’s previous justification to raise petrol prices – that the Global oil prices are on the rise. Why is Ahmad Maslan now taking a different stand on petrol prices when global oil price plummeted? Is he suffering from cognitive dissonance that he could now hold two contradictory stands on the same issue?

Ahmad Maslan also claimed that the government is still subsidising 12 cent per litre for RON95. Presuming Ahmad Maslan is right, the current market price for RON95 should be RM2.42 per litre. If so, what is the current market price for RON97? Putrajaya promised to float RON97 according to market price. With Global oil price fallen more than 30% since June, it is clear that Putrajaya has gone back on its promise to float RON97.

Ahmad Maslan’s claim that the government might consider implementing fuel tax should global oil prices continue to fall is most shocking and irresponsible. With a poor public transport system coupled with one of the highest vehicle to population ratio in the world; fuel tax, if implemented in Malaysia would be regressive and hit the poor the hardest.

The poor that could not afford personal transport will be burdened by fuel related expenses hike – the increase in bus fare and transport expenses. With a fuel tax, the hike in fuel related expenses would represent a higher percentage of income of the poor compare to the rich, making them suffer the most.

I urge Putrajaya to ditch the idea of fuel tax as it will further widen the inequality of income in Malaysia making the rich richer and the poor poorer. A joint study by UM and Khazanah Research Institute (KRI) has shown that the nation’s inequality is on the rise. Instead of further worsening the situation, Putrajaya must come out with plans to address Malaysia’s inequality of income.

Media Statement by Chong Zhemin, DAP Perak Economic Development Bureau Chief and Political Secretary to Taiping MP on 7 Nov 2014

Putrajaya failed to float RON97 according to market price. Can Malaysians trust Putrajaya to implement the targeted fuel subsidy mechanism as promised?

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Deputy Finance Minister Ahmad Maslan said yesterday that the targeted fuel subsidy mechanism which provide subsidy to household earning below RM4,000 will be implemented in June 2015.

He commented further that the middle class will be given a partial subsidy and the high income group will pay the RON95 petrol according to market price.

On paper, the multi-tiered subsidy mechanism appears to plug the subsidy leakages and channel subsidies to the targeted lower income group. However the implementation of the targeted fuel subsidy mechanism is complicated, bureaucratic and troublesome.

Even with the use of a secure verification system such as MyKad or petrol subsidy card, the proposed system is still open to abuse. How will the government prevent the card to be loaned to others to purchase subsidised fuel?

With the impending GST implementation, the proposed fuel subsidy system will be a double whammy and add to the burdens of those already living in hardship.

I urge Putrajaya not to rush through the targeted fuel subsidy system hastily. Public feedback must be gathered and a more comprehensive study needs to be done on the proposed system.

Ahmad Maslan said that the high income group will pay the RON95 according to market price. We should take Ahmad Maslan’s word with a pinch of salt. This is as the government had previously promised to float the RON97 according to market price but failed to honor their promise. With the drop of global oil price, the price Malaysians paid for RON97 currently is higher than the market price.

Ahmad Maslan also mentioned that the RON95 price will be maintained until June next year. Unless the government announces the implementation of fuel tax, it will be “daylight roberry” for Malaysians who are now paying a higher than market price for RON95. This is because Putrajaya had previously promised a 28 cent per liter subsidy for RON95.

If Putrajaya words could not be trusted when implementing the current blanket fuel subsidy system, how can Malaysians trust Putrajaya to implement the targeted fuel subsidy mechanism as promised?

Media Statement by Chong Zhemin, DAP Perak Economic Development Bureau Chief and Political Secretary to Taiping MP on 24 Oct 2014

Malaysians now pay higher than market price for RON 95, how will the RM 35.6 billion fuel subsidy savings be spent?

In my media statement yesterday, I have argued that the 11.71% drop in oil prices is more than the 10.85% of RON95 subsidy. Therefore it is safe to assume that the current market price for RON95 is lower than the RM2.30 per litre Malaysians are now paying.

AmResearch has released a report on fuel subsidy confirming my suspicion that Malaysians are indeed paying a higher than market price for RON95. The report estimated the breakeven of the global crude oil price is at an average of USD84.80 per barrel if RON95 remains at RM2.30 per litre without government subsidy.

With Brent closing at USD84.47 yesterday, Malaysians are now effectively paying fuel tax for RON95.

The AmResearch report also estimated a 10% reduction in global crude oil could potentially reduce overall fuel subsidies to about RM35.6 billion. With global oil plummeted more than 11%, Putrajaya must be transparent on how will the RM35.6 billion fuel subsidy savings be spent?

In Budget 2015 Putrajaya has estimated to collect a total of RM17.3 billion of transport related taxes in the form of excise duty(RM8 billion), car sales tax(RM4.5 billion), import duty(RM1.1 billion) and vehicle licenses(RM2.4 billion).

With car owners already paying such a huge sum of transport related taxes, Putrajaya must immediately pass on the fuel subsidy savings to the people.

I urge Putrajaya to reduce the price of RON95 and diesel with immediate effect.

Media Statement by Chong Zhemin, DAP Perak Economic Development Bureau Chief and Political Secretary to the Taiping MP on 17 Oct 2014

Global oil prices plunged more than 11% since 1 October, are we now “subsidising” the government for RON95?

Global oil prices continue to plunge with Brent hitting a low of USD83.13 today. This is an 11.71% drop compare to the Brent price on 1 October at USD94.16 when the government announce the fuel hike in Malaysia.

Domestic Trade, Cooperative and Consumerism ministry had earlier issued a statement on 1 October confirming that the market price for RON95 was RM2.58 and the government is subsidising RM0.28 per liter of RON95.

The RM0.28 subsidy represents 10.85% of the RON95 market price on 1 Oct. It should be noted that the 11.71% drop in Brent price since 1 October is even higher than the 10.85% fuel subsidy government is providing.

With Brent plummeting 11.71%, it is safe to assume that the market price for RON95 is now lower than the RM2.30 per litre Malaysians are now paying.

Ron95 is now cheaper than RM2.30 without fuel subsidy. Are Malaysians now “subsidising” the government for RON95?

Putrajaya claimed that the government will still need to bear RM 21billion of subsidy after the petrol hike. With the drop in oil prices, Putrajaya must now answer where is the RM21 billion and how will the money be spent?

Putrajaya must not delay further and immediately reduce the price of RON95 to avoid Malaysians paying a higher than market price for petrol.

Media Statement by Chong Zhemin, DAP Perak Economic Development Bureau Chief and Political Secretary to the Taiping MP on 16 Oct 2014

Global oil prices hit four-year low – call for the government to pass on the subsidy savings to the people and reduce RON95 and diesel price

As reported by Bloomberg, global oil prices fell to a four-year low on Monday, hitting an intraday low of USD87.74 per barrel for Brent. This is the lowest level seen by Brent since Dec 2010.

When Putrajaya announced the fuel hike for RON95 and diesel on 1 Oct, Brent oil was at a price of USD94.16. The Brent has slid even further since then and the intraday low of USD87.74 represents a 6.8% drop of price since 1 Oct.

I urge the government to pass on the subsidy savings to the people and immediately announce a reduction in RON95 and diesel price to reduce the burden of the people.

It should be further noted that the 6.8% drop of global oil price is even higher than the 6% GST rate to be implemented starting next year.

Prime Minister Najib can boast about not imposing GST on RON95 and diesel. However, if he fail to reduce the prices of RON95 and diesel in line with the fall in global oil price, Putrajaya is effectively imposing a higher than GST rate on RON95 and diesel based on the latest global oil price.

I have previously quoted a Reuters report on 3 October that energy analyst all agreed that global oil price will continue to fall in 2015. This has forced energy analyst to make the largest downward revision to their oil price forecast in almost two years.
In anticipation of the falling oil prices persisting into 2015, I urge Najib to review the price of RON95 and diesel every fortnight in line with the falling global oil prices.

Malaysians deserve to enjoy cheaper fuel price especially at a time when global oil prices are tumbling and Malaysians are now having a tough time to put bread on the table due to the rising cost of living.

Media Statement by Chong Zhemin, DAP Perak Economic Development Bureau Chief and Political Secretary to the Taiping MP on 14 Oct 2014

Hasan Malek lied through his teeth when he said the fuel hike is minimal where Malaysians could potentially pay a higher than market price for fuel in 2015

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Domestic Trade, Cooperative and Consumerism Minister Hasan Malek said the below in a press conference when asked to comment on the fuel hike.

“If we do a calculation, the increment is minimal, If there is going to be an impact (on inflation), it will be minimal. It is not big.”

Hasan Malek lied through his teeth when he said the fuel hike is minimal. His ministry issued a statement on Wednesday confirming that the current market price of RON 95 is RM2.58 per litre. This means that the government is subsidizing 28 cents per litre of RON95 after the price hike.

Although the Finance Ministry had denied reports that GST will be imposed on petrol, insisting a decision has yet to be made; Malaysians are under no illusion that petrol will be exempted from GST.

If the fears of GST on petrol are real, the petrol price would increase to RM2.44 after 6% GST is added on, making the petrol price just 14 cents short of the current market price.

On Wednesday, Reuters published a report on a monthly conducted poll on 30 energy analysts on the oil price forecast in 2015.

Let me quote the report from Reuters as below,

“Energy analysts have made the largest downward revision to their oil price forecasts in almost two years, a monthly Reuters poll showed on Wednesday, with the marked weakness in the price of Brent seen persisting into 2015.”

If GST is imposed on petrol and the world crude oil price continues to fall as predicted by energy analysts, Malaysians could potentially pay a higher than market price for petrol in 2015.

This would also mean that Putrajaya is not only prepared to abolish fuel subsidy in total but also to start collecting taxes on Malaysians fuel consumption which is a shame for an oil producing country like Malaysia.

I urge Najib to immediately clarify if GST will be imposed on petrol and stop ducking and weaving on this issue. Najib cannot wait until budget 2015 is tabled to answer this simple but crucial question. After the unjustified fuel hike, Malaysians want an immediate answer as to what the future holds for us in 2015.

Media Statement by Chong Zhemin, DAP Perak Economic Development Bureau Chief and Political Secretary to the Taiping MP on 3 Oct 2014

No reason for Najib to raise petrol price when international crude oil price is at the lowest in nearly three years

When the international oil price fell to the lowest in nearly three years, BN has decided to increase the petrol prices at a time when the people are suffering from rising cost of living. This is not only a betrayal to the people’s trust but also a huge burden to the people.

Yesterday, India and United Kingdom has just announced the price drop in petrol prices, making the petrol hike in Malaysia the most ironic.

India announced a drop in petrol price by 65 paise (RM 4 cents). United Kingdom has also reduce the petrol prices by 5 pence (RM 27 cents). There is absolutely no reason for Najib administration to increase the petrol price when countries around the world are reducing petrol prices.
Although Deputy Finance Minister Ahmad Maslan has denied the decision to impose GST on petrol has been finalise, based on the conversation by the customs department officer, petrol is not included in the GST exempt list. Hence there is a huge chance that GST will be impose on petrol.

Imposing GST on petrol will raise the petrol price to RM 2.44 after the 6% GST, this would mean a 34 cents of price hike compare to before the price increase. This is double whammy to the people.

I urged Najib to immediately retract the decision for petrol price hike, and immediately announce a price reduction of petrol in line with the current internation oil price which is declining. This is the best time for Najib to prove that he is sincere in fulfilling BN first promise in the 13th General Election manifesto, easing the cost of living.

Media Statement by Chong Zhemin, DAP Perak Economic Development Bureau Chief and Political Secretary to the Taiping MP on 1 Oct 2014