UKM vice-chancellor: Fuel price hikes won’t choke growth, private consumption

BANGI: Retail fuel prices, which saw another round of increase in February, remain in the lowest range and won’t significantly impact private consumption or choke Malaysia’s economic growth.
Not everything is tied to oil prices, Universiti Kebangsaan Malaysia (UKM) vice-chancellor Professor Datuk Seri Dr Noor Azlan Ghazali said yesterday.
“There are many other indicators as well (for the private consumption pattern). Consumption also depends on how you see the economy and also the domestic situation, and which sectors you are looking at,” he added.
Hence, he opined that Malaysia’s private consumption would not be significantly changed due to the recent hike in retail fuel prices.
“Besides, Malaysia remains in the class of countries that have lower retail fuel prices and thus, is not expected to unnecessarily choke off growth,” he said.
He told reporters this after announcing UKM’s separate collaborations with the Institute for Democracy and Economic Affairs (IDEAS) and the World Bank yesterday.
Malaysia’s petrol and diesel prices have been placed on a managed float system since Dec 1, 2014, following the removal of fuel subsidies.
Fuel prices of both RON95 and RON97 increased by 20 sen for February, while the price of diesel rose by 10 sen.
Also present at the event were World Bank country manager Faris Hadad-Zervos, IDEAS founding president Tunku Zain Al-Abidin Tuanku Muhriz and chief executive Wan Saiful Wan Jan.
Providing an outlook on crude oil prices, Hadad-Zervos said it would continue to fluctuate, but unlikely to see a massive swing moving forward.
“The fluctuation is a new normal to the world, but, we are unlikely to see an oil price spike as seen in the past, predominantly for technical reasons,” he added. – Bernama