Malaysia is an oil producing country too. A brief info below shows our petrol price is the highest among other OIL PRODUCING countries
MALAYSIA- RM2.70/litre
UAE– RM1.19/litre
Eygpt– RM1.03/litre
Bahrain– RM0.87/litre
Qatar– RM0.68/litre
Kuwait– RM0.67/litre
Saudi Arabia– RM0.38/litre
Iran– RM0.35/litre
Nigeria– RM0.32/litre
Turkmenistan– RM0.25/litre
Venezuela– RM0.16/litre
A simple explanation from Tun Dr. Mahathir, extracted from his http://www.chedet.com/ blog ....
"Can the Government subsidise? I am the “adviser” to Petronas but I know very little about it beyond what is published in its accounts. What I do know may not be very accurate but should be sufficient for me to draw certain conclusions.
Roughly Malaysia produces 650,000 barrels of crude per day. We consume 400,000 barrels leaving 250,000 barrels to be exported.
Three years ago the selling price of crude was about USD30 per barrel. Today it is USD130 – an increase of USD100. There is hardly any increase in the production cost so that the extra USD100 can be considered as pure profit.
Our 250,000 barrels of export should earn us 250,000 x 100 x 365 x 3 = RM27,375,000,000 (twenty seven billion Ringgit).
But Petronas made a profit of well over RM70 billion, all of which belong to the Government.
By all accounts the Government is flushed with money.
But besides petrol the prices of palm oil, rubber and tin have also increased by about 400 per cent. Plantation companies and banks now earn as much as RM3 billion in profits each. Taxes paid by them must have also increased greatly.
I feel sure that maintaining the subsidy and gradually decreasing it would not hurt the Government finances.
In the medium term ways and means must be found to reduce wasteful consumption and increase income. We may not be able to fix the minimum wage at a high level but certainly we can improve the minimum wage."
What Tun said makes sense. He is more practical and really cares. I am certain that if he is still PM, he would have done what he had mentioned earlier.
I feel, the Government should have adopted a more prudent approach, that is, "if the Government have to increase the price, a little price increase is not out of order or step by step (or stagger) increase the price which was done a few years ago" based on Tun's analysis of the number of barrels of crude oil per day produced and consumed.
The Government should have given sufficient notice to inform the Rakyat early and indicate the time frame to move to the equilibrium market price. This way, the Rakyat can prepare to face the reality by finding a solution to overcome and lessen the burden, example buying a smaller cc or litre car, plan out their journey using the public transport or even fit their cars with gas cylinder as an alternative to overcome the high petrol price which had jump to RM2.70/litre from RM1.92/litre effective today.
Seriously, where have all our smart Economist gone to? I really would like to know who is our Prime Minister's advisers who had given him this radical approach - the sudden quantum leap of the fuel price. I am sure the Rakyat are truly disappointed today with this move. What Tun said here is right too,
"I believe the people expect the increase of petrol price. But what they are angry about is the quantum and the suddenness. The Prime Minister was hinting at August but suddenly it came two months earlier, just after the ban on sale of petrol to foreigners. If the increase had been more gradual, the people would not feel it so much. But of course this means that the Government would have to subsidise, though to a decreasing extent".
This is not an advertisement column for Tun's blog, anyway feel free to visit his blog http://www.chedet.com/ for more positive comments from our Rakyat who had written in to thank him for his rational thinking and approach to the oil price. This is what the Rakyat wants.
MALAYSIA- RM2.70/litre
UAE– RM1.19/litre
Eygpt– RM1.03/litre
Bahrain– RM0.87/litre
Qatar– RM0.68/litre
Kuwait– RM0.67/litre
Saudi Arabia– RM0.38/litre
Iran– RM0.35/litre
Nigeria– RM0.32/litre
Turkmenistan– RM0.25/litre
Venezuela– RM0.16/litre
A simple explanation from Tun Dr. Mahathir, extracted from his http://www.chedet.com/ blog ....
"Can the Government subsidise? I am the “adviser” to Petronas but I know very little about it beyond what is published in its accounts. What I do know may not be very accurate but should be sufficient for me to draw certain conclusions.
Roughly Malaysia produces 650,000 barrels of crude per day. We consume 400,000 barrels leaving 250,000 barrels to be exported.
Three years ago the selling price of crude was about USD30 per barrel. Today it is USD130 – an increase of USD100. There is hardly any increase in the production cost so that the extra USD100 can be considered as pure profit.
Our 250,000 barrels of export should earn us 250,000 x 100 x 365 x 3 = RM27,375,000,000 (twenty seven billion Ringgit).
But Petronas made a profit of well over RM70 billion, all of which belong to the Government.
By all accounts the Government is flushed with money.
But besides petrol the prices of palm oil, rubber and tin have also increased by about 400 per cent. Plantation companies and banks now earn as much as RM3 billion in profits each. Taxes paid by them must have also increased greatly.
I feel sure that maintaining the subsidy and gradually decreasing it would not hurt the Government finances.
In the medium term ways and means must be found to reduce wasteful consumption and increase income. We may not be able to fix the minimum wage at a high level but certainly we can improve the minimum wage."
What Tun said makes sense. He is more practical and really cares. I am certain that if he is still PM, he would have done what he had mentioned earlier.
I feel, the Government should have adopted a more prudent approach, that is, "if the Government have to increase the price, a little price increase is not out of order or step by step (or stagger) increase the price which was done a few years ago" based on Tun's analysis of the number of barrels of crude oil per day produced and consumed.
The Government should have given sufficient notice to inform the Rakyat early and indicate the time frame to move to the equilibrium market price. This way, the Rakyat can prepare to face the reality by finding a solution to overcome and lessen the burden, example buying a smaller cc or litre car, plan out their journey using the public transport or even fit their cars with gas cylinder as an alternative to overcome the high petrol price which had jump to RM2.70/litre from RM1.92/litre effective today.
Seriously, where have all our smart Economist gone to? I really would like to know who is our Prime Minister's advisers who had given him this radical approach - the sudden quantum leap of the fuel price. I am sure the Rakyat are truly disappointed today with this move. What Tun said here is right too,
"I believe the people expect the increase of petrol price. But what they are angry about is the quantum and the suddenness. The Prime Minister was hinting at August but suddenly it came two months earlier, just after the ban on sale of petrol to foreigners. If the increase had been more gradual, the people would not feel it so much. But of course this means that the Government would have to subsidise, though to a decreasing extent".
This is not an advertisement column for Tun's blog, anyway feel free to visit his blog http://www.chedet.com/ for more positive comments from our Rakyat who had written in to thank him for his rational thinking and approach to the oil price. This is what the Rakyat wants.
Dr. Tan Kim Sai
6 comments:
Tun is right. If the price is gradual the rakyat would not feel it. By doing that, not even the rakyat, I am sure even companies would have held emergency meeting to discuss the impact of the sudden hike in fuel price.
The government message is clear, you are the user and you resolve it yourself.
Pak Lah, what have you done? Your action is now being criticised by the opposition and they are happily demonstrating in the street.
When the opposition makes a mistake we should be demonstrating too, right. No demonstration means the opposition has not made any mistake yet, right again, right?
Well you have decided to simply let the fuel price float in the market. Now everyone of us is feeling very frustrated with your action to increase fuel price to RM2.70/litre. A comparison of fuel price before and after 5Jun08:
Before
Old Price RM1.92/litre
If we buy RM60 of fuel, we get 31.25 litres
After
New Price RM2.70/litre
If we buy RM60 of fuel, we get
22.19 litres
We are not amused. You have lost one vote for bn
Dear rakyat, we are paying more than RM2.70/litre. Don't forget you are paying toll too. We are caged in by so many tolls in Malaysia. Just today I had to pay at least RM10 of toll charges.
The govt wants to lessen our burden
by giving us road tax reduction. My suggestion to the govt is to DISMANTLE ALL THE TOLL in Malaysia.
The Star : Saturday June 7, 2008
Umno Youth: It’s time to cut toll rates
SEREMBAN: Umno Youth has urged the Government to initiate talks with highway concessionaires so that toll rates can be reduced, perhaps even abolished.
“Concessionaires have recovered their money and have been registering huge profits for many years,” said deputy chief Khairy Jamaluddin.
The concessionaires, he added, could introduce plans to lower rates, particularly during peak hours.
“I am sure we can come up with ways to reduce the financial burden on the people,” he added.
He said public transport should be improved to first-class standards to ensure more effective and efficient mobility for the people.
NST Online : NewsBreak
2008/06/06
“I also hope the government will review the RM625 yearly rebate offered to owners of cars below 2,000cc and the RM150 rebate for owners of motorcycles below 250cc.
“If it is found to be insufficient, they should increase it the following year,” he added.
right ...where have all the bright guys and dolls went to?????
What's next? The price of everything is going up and inflation will hit 4-5% this year. Soon it will take over GDP figure too. Previous PM wants GDP to go up. Today we want inflation to go up so that small trader becomes milionaires. Do you know a bowl of mee is now RM4.50 and going higher.
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