Fall in fuel prices may bulwark the GST impact on sales

Kuala Lumpur: Yesterday, we featured an article regarding the curious case of sales drop in Malaysian auto market because of the GST forms implementation and repealing the oil subsidy. These factors resulted in a 22% sales fall in April and 9% decline in May putting a shocking impact on the car manufacturers.

Although, The Domestic Trade Cooperatives and Consumerism Ministry (KPDNKK) has just announced that petrol and diesel prices for the month of August, 2015 will be cut down. It might be possible that KPDNKK took this step considering the sales drop in the earlier months. The revised petrol prices comes as RON 95 petrol at RM2.05 per litre and RON 97 petrol at RM2.45 per litre which is inclusive of the 6% GST implication. Besides petrol the diesel is also cut down to RM1.95 and Euro 5 diesel at RM2.05.

These prices will surely affect the auto market as it appears completely favourable from the earlier prices which were RM2.15 per litre for RON 95 petrol and RM 2.55 per litre for RON 97 petrol. Diesel was priced at RM2.05 whereas the Euro 5 diesel was RM2.15.

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This fall in fuel prices is an appreciable reform to bolster the sales and cushion the impact caused by GST. It is believed that this drop might bring back the discouraged 10% potential customers which rescinded their decision earlier to buy a car because of its higher running costs.