RON95 prices at the pump are expected to fall by 10 to 15 sen per litre in January next year, said PKR vice-president Rafizi Ramli, bringing it to RM1.80 to RM1.85 per litre.

He said this estimation is based on the Means of Platts Singapore’s (Mops) price of the fuel up to Dec 20, and the estimated Mops price this week based on current Brent crude oil prices.

Nevertheless, Rafizi said the fall does not reflect the fall in crude oil prices on the global market, and urged for a new pricing mechanism to be put in place.

He said that RON95 prices in Malaysia had fallen only by seven percent since July last year to RM1.95 per litre, compared to Brent crude oil prices that has fallen by 66 percent to US$37 a barrel over the same period.

“This huge discrepancy is caused by the drastic fall of the ringgit’s value compared to the US dollar.

“Therefore the price of RON95 set through a formula that is dependent on the ringgit-dollar exchange rate no longer reflects the true cost of a litre of RON95 that should be paid by the consumer because it has been distorted by the falling ringgit exchange rate.

“I had already proposed before for a new pricing mechanism that is based on the actual production cost of Malaysian oil refineries that is denominated in ringgit to reduce the impact of uncertainty in the ringgit’s exchange rate to the dollar,” he said in a statement today.

Retail fuel prices in Malaysia are currently on a managed float that is adjusted at the beginning of each calendar month, and is currently at RM1.95 per litre in the case of RON95.

The Mops price for RON95 is among the factors considered by the government in setting the price for the fuel. It is denominated in US dollars.

Meanwhile, Rafizi said that since his suggestion is not being taken up as ministers "can’t understand" it, he called for other measures to pass on the fuel price savings that consumers ought to enjoy.

He said the fare prices for public transport should account for the impact of lower fuel prices, which would in turn reduce the operating cost.

In addition, he said the government should drop its plans to reduce electricity rebates from 2.25 sen per kilowatt hour to 1.52 sen per kilowatt hour, again because fuel prices have fallen.