PRICE OF FUEL MAY DROP TO RM1.60 PER LITER
PUTRAJAYA: There is good news for consumers amidst the gloom of the current economic crisis.
Inflation for the country has peaked and prices of goods have started to come down.
Domestic Trade and Consumer Affairs Minister Datuk Shahrir Samad said the Consumer Price Index (CPI) for October had shown a reduction of 0.4% as compared to the previous month.
“In September, the price index was 8.2% while for October, it is recorded at 7.6%. This reflects the current downward trend of fuel, food and commodity prices such as palm oil, which make up 80% of household spending.
“We expect this reduction in inflation to continue. Although we don’t know whether we will be able to achieve the 3.8% consumer price index we saw in May this year, we can definitely get inflation under control below 7%,” he told reporters at his office here on Friday.
Shahrir said he was also confident of a further price reduction in food items as the effect of a decline in the market price of many commodities such as flour had yet to kick in.
“The prices are coming down not due to poorer demand from consumers like what is currently happening in the United States, but from the reduction in commodity prices that further reductions in prices of milk were also expected within this month.
Malaysia recorded the highest CPI at 8.5% in August.
Shahrir said the Cabinet meeting on Friday also decided to have the Economic Council discuss the possibility of either continuing with the current managed float mechanism in determining petrol pump prices or to set a floor price for fuel.
“Any discussion for a floor price will take into account the possibility of losses suffered by the petrol station owners.
“The exco will meet on Dec 1 and we will decide then. Today, Malaysians are paying RM2 for each litre when the real petrol pump price should be RM1.60 per litre without government subsidy.
“This is the first time Malaysians are paying more than the market price for petrol,” he said, adding that this was because the global price was declining at a drastic rate. Shahrir said Malaysians could expect another reduction in petrol pump price by Dec 1.