OIL companies and petrol stations are not allowed to determine pump prices because it may result in inflation in the country.

Domestic Trade, Co-operatives and Consumerism Minister Datuk Seri Ismail Sabri Yaakob said petrol stations were not allowed to sell petrol below the fixed price because this might result in motorists having to pay different prices at different outlets.

Currently, premium fuel RON97 is priced at RM2.05 (S$0.85) a litre and RON95 is sold at RM1.80 per litre.

"The retail price of petrol is set through the Automatic Pricing Mechanism, which has been in use since March 1983 to ensure price and supply stability, control inflation and to guarantee returns to both petrol station operators and petrol companies.

"If petrol companies and petrol station operators are allowed to set their own pump price, consumers will have to pay different prices all the time.

"Additionally, the pump price will increase when the world crude oil price rises.

"This will cause inflation in the country," he said in a written reply to a question from Tony Pua (DAP-Petaling Jaya Utara).

Later, at a press conference at the Parliament lobby, Pua said he could not accept the reply given by Ismail Sabri.

"If a petrol station or petrol company decides to sell at a lower price, it is at its own expense.

"For example, if Shell decides to sell at RM1.70 per litre, instead of RM1.80, it is because it is willing to take a lower profit or because it is more efficient. So, it can give a lower price to users."

He said the government must allow petrol companies to compete.

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--New Straits Times