..:: Will our Country Reduce Oil Price ? ::..

Malaysia plans to cut fuel prices if oil extends fall

If the oil price trend continues downwards, it is only right that it is reflected in the domestic price, says Deputy Prime Minister

MALAYSIA'S government, which raised gasoline prices 41 per cent in June, plans to reduce tariffs at the pumps should crude oil extend declines.

“Certainly, there is a desire for us to reflect the current market situation,” Deputy Prime Minister Datuk Seri Najib Razak said today in Kuala Lumpur. “If the trend continues downwards, it is only right that it is reflected in the domestic price.”

Asian countries from India to Indonesia raised fuel prices after oil prices soared to records this year. Cutting prices in Malaysia would swell a fuel subsidy that last year cost the government RM35 billion (US$11 billion). Crude today extended the biggest monthly decline since 2004.

The Cabinet is discussing each week whether to cut prices, Najib said. He declined to say when a decision might be made. Crude oil futures in New York have fallen more than US$23 a barrel, or 16 per cent, from a record US$147.27 on July 11.

Malaysian Domestic Trade and Consumer Affairs Minister Datuk Shahrir Samad said in an interview this week that the government may cut prices should crude drop below US$125 a barrel for at least three weeks.

Crude oil for September delivery declined as much as 86 cents, or 0.7 per cent, to US$123.22 a barrel on the New York Mercantile Exchange. The contract traded at US$123.34 a barrel at 10.33 am Singapore time. - Bloomberg