How does the Automatic Pricing Mechanism set weekly diesel retail prices?

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The Automatic Pricing Mechanism's Role in Setting Weekly Diesel Retail Prices

The Ministry of Finance (MOF) sets the weekly retail prices for petroleum products, including diesel, by utilising the Automatic Pricing Mechanism (APM) formula. This mechanism adjusts prices based on fluctuations in global oil market prices. For the period of June 19 to June 25, the retail price of diesel in Peninsular Malaysia was set at RM2.81 per litre, an increase of seven sen from RM2.74.
Weekly Price Adjustments for Fuel

The MOF announces changes to fuel prices on a weekly basis. For the week of June 19 to June 25, RON97 petrol saw a seven sen increase, reaching RM3.14 per litre. In contrast, the price of RON95 petrol remained stable at RM2.05 per litre. Similarly, the retail price for diesel in Sabah, Sarawak, and Labuan was maintained at RM2.15 per litre.
Diesel Price Dynamics in Peninsular Malaysia

In Peninsular Malaysia, the retail price of diesel experienced a seven sen increment, moving from RM2.74 to RM2.81 per litre for the specified week. This adjustment reflects changes in the global oil market. The MOF noted that the diesel price in Peninsular Malaysia remained below the floated price of RM3.35 per litre observed on June 10, 2024.
The APM Formula's Application

The MOF stated that the determination of these retail prices is directly linked to the weekly retail pricing of petroleum products, calculated through the Automatic Pricing Mechanism (APM) formula. While the mechanism is employed to set these prices, the specific details and components of the APM formula are not elaborated upon in the provided information. The government indicated its continued monitoring of global crude oil price impacts.

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How does the Automatic Pricing Mechanism set weekly diesel retail prices?

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