Reasons Why Fuel In Malaysia Is Cheaper Before Being A Wild Football

Reasons Why Fuel in Malaysia is Cheaper (Freepik)

YOGYAKARTA - There is news that the price of fuel oil (BBM) in Malaysia is much better in quality and the price is much cheaper. Why is fuel in Malaysia cheaper?

Actually, the price of fuel that has been regulated by the Malaysian government cannot be compared to the price of fuel in Indonesia, why? Then there are differences in the price-forming section in the two countries, the price of fuel in Malaysia can continue to be dammed despite the increase in oil prices.

Malaysia Applys Large Subsidy

This is the result of the massive use of subsidies used by the Malaysian Government. Komaidi Notonegoro, Executive Director of the Reformer Institute, voiced basically the Malaysian Government also provides fuel subsidies so that the fuel price also does not follow the market scheme.

It's just that the purpose of subsidies is different from the subsidy scheme in Indonesia. "Malay concentration with us (Indonesia) is different. They concentrate on growth so that it provides a large subsidy," said Komaidi in a written press statement in Jakarta, Tuesday (6/9/2022).

According to him, the information circulating in the community regarding fuel prices in Malaysia that are cheaper compared to in the country should also be shown clearly by the government or Pertamina. In this way, the information that develops in the community does not become a wild ball and heats the atmosphere.

"If someone says that Malaysia does not have subsidies, they may not have received complete information. This kind of thing should be explained simply by the government or Pertamina," said Komaidi.

Irto P Ginting, Corporate Secretary of Pertamina Patra Niaga (PPN), Pertamina's Commercial and Trading Subholding, said that when compared to the overall amount of subsidies disbursed by Malaysia, it could not actually match the subsidies that had been given by the Government of Indonesia.

"Their subsidies (Malaysia) are actually large, but when compared to all subsidies issued by the Government of Indonesia, it is much larger," said Irto.

In fact, the fuel retail selling price (HJE) in Malaysia is cheaper. Then, the products marketed are also fuel that is more environmentally friendly.

The determination of retail prices for petroleum products, whether gasoline or diesel in Malaysia, which has been in effect since 1983, has been regulated according to operational rates, margins for distributors of petroleum products, commissions for gas station owners, sales taxes and subsidies.

With the provision of subsidies and sales tax exemptions, the price of fuel in Malaysia is the cheapest compared to neighboring countries in Southeast Asia. Then, there are other facts that make it impossible to compare fuel prices in Malaysia with in Indonesia on an apple to apple basis.

Malaysia's Population is much less

First, Malaysia is an oil exporter (Net Exporter) while Indonesia is an importer (Net Importer). Second, Malaysia's population is 32 million people. This is far less than the total population of Indonesia which is 260 million people.

In terms of the vehicle population, in Malaysia there are 33 million vehicles, although in Indonesia the number of vehicles is more than four times that, which is 145 million vehicles. Finally, it is related to the area and complexity of distribution in Malaysia which is much simpler than Indonesia. As is known, Malaysia is only temporary land, Indonesia is an archipelagic country, so the variation of transportation modes applied for automatic distribution adds to the tariff section.

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