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'I have approved the increase with immediate effect,' Domestic Trade and Consumer Affairs Minister Shahrir Samad told The Straits Times yesterday.
He said his ministry is negotiating with the banks to reduce the credit card charges from 1 per cent to 0.5 per cent of the sale amount.
The government is also restricting the number of workers at the pumps to two at most and calling a stop to 24-hour operations.
The swift move has averted possible chaos at petrol stations after 400 operators in northern Malaysia announced that they planned to stop accepting credit cards from yesterday.
Most stations are still accepting credit cards, although there have been reports of petrol stations in some parts of Kuala Lumpur refusing to do so.
The confusion is compounded by rumours of a petrol station strike in Sabah, causing thousands of motorists to rush to fill up on Tuesday.
But the situation is back to normal after the Petroleum Dealers' Association clarified that there is no strike.
Mr Wahid Bidin, its president, said operators had also been told to accept credit cards after the government raised the commission and promised to negotiate with the banks.
The problem arose after Malaysia partially lifted fuel subsidies, allowing the price of petrol to rise by 41 per cent and that of diesel by 63 per cent earlier this month.
Petrol station operators protested, saying that their profit margins, already at a low 3.5 per cent, would be further eroded.
'Our profit margin is already very low as the government controls our gross income but not expenditure,' said Mr Alang Zari Ishak, head of the Esso Petroleum Dealers' Association.
They get a fixed amount for each litre sold. Before yesterday, this was nine sen per litre of petrol, and 4.5 sen per litre of diesel. This has since been raised to 12.19 sen and seven sen, respectively.
At the old petrol price of RM1.92 (80 Singapore cents) a litre, a station owner would be able to sell 50 litres to get RM100, yielding RM4.50 in profit.
But after the price went up to RM2.70 a litre, RM100 would mean only about 35 litres sold, or just a RM3.20 margin.
For credit card sales, the operators pay 1 per cent to the banks, amounting to RM1 for every RM100 charged.
At the old petrol price, the operators would earn RM3.50 for every RM100 charged, but just RM2.20 at the new price.
But while swift action averted chaos yesterday, the opposition is planning to tap public anger over rising prices. It is hoping to rally thousands of people for a huge demonstration next month to protest against the fuel price hike.
