"So, for August, September and October, it was true that the pump price was lower than the commercial price because of the elements of subsidy for petrol and diesel promised by the government under the restructuring scheme.

"But, in October, the price of crude oil dropped drastically. In fact, the government subsidy for petrol dropped from RM334 million in September to RM15 million in October. But, we still have to manage it through a proper system," he said.

He was responding to Dr Dzulkefly Ahmad (PAS-Kuala Selangor) who said at the crude oil price of US$60 or US$70 per barrel, the government was no longer subsidising the petrol price at the pump.

Shahrir admitted what Dzulkelfy said was true, saying the government had never hidden this fact and he himself had announced that when the pump price was fixed at RM2 per litre on Nov 17, the government would not be paying subsidies.

Winding-up debates on Budget 2009 for his ministry at the committee stage, Shahrir said the government had yet to decide on the kind of action to be taken if the crude oil price continues to decline in future.

Previously, he has said the Economic Council will meet on Dec 1 to discuss the situation on whether there should be a floor price for petrol and diesel or the government should go with the managed float system.

Earlier, he explained that according to the existing automatic price mechanism, the pump price is decided based on the average price of petrol in the past two weeks or the Mean of Platts Singapore (MOPS), which is the measure of crude oil pricing in Singapore.

He said the price of crude oil had dropped drastically from an average US$113 per barrel at the end of September, to US$85 middle of October, US$76 end of October and US$63 middle of November.

Shahrir also said the previous reductions in oil price made every two weeks did not burden the industry as they only lost three sen per litre each time the price was lowered by 15 sen.

On the price of goods which many claimed has not come down despite the lower price of oil, he said the government could only control certain items whose licences are issued by the ministry.

As for the other goods, especially cooked food, he suggested for the local authorities which issue the licence to traders to impose certain regulations to ensure they comply with the realities of the current situation.

"We are not a communist government where we fix the price for everything. We prefer an open, competitive and controlled market. We cannot rely solely on law enforcement exercise as it is restricted towards certain controlled items only," he said.