What should the petrol price be?
Okay, you tell me what the local petrol price should be now, bearing in mind that they have removed subsidies completely now.
Of course, we also need to factor in the need to conserve scarce fossil fuels.
I think RM1.80 without any subsidy would be a more acceptable price now, taking into account the need to bring down food prices and stimulate the local economy while trying to encourage fossil fuel oil conservation and prevent wastage at the same time.
Thanks to Ong Eu Soon for compiling this chart:
| Petrol price | Global crude | |
| RM/litre | US$/barrel | |
| 01/10/00 | 1.20 | 35 |
| 20/10/01 | 1.30 | 20 |
| 01/05/02 | 1.32 | 26 |
| 31/10/02 | 1.33 | 28 |
| 01/03/03 | 1.35 | 31 |
| 01/05/04 | 1.37 | 38 |
| 01/10/04 | 1.42 | 47 |
| 05/05/05 | 1.52 | 48 |
| 30/07/05 | 1.62 | 57 |
| 26/02/06 | 1.92 | 63 |
| 05/06/08 | 2.70 | 120 |
| 17/11/08 | 2.00 | 55 |
But then they have gone and based the country’s national budget on a much higher oil price, with a higher budget deficit projected! They really have to come up with a new budget now.
Says blog reader tan, tanjong bunga:
The recent budget is out-of-sync with the current oil price of US$55-56 per barrel.
If the govt does not review its budget based on current situations, we can expect the govt to maintain the price of petrol at RM1.92 to RM2. The extra RM billions obtained from no subsidy plus sales profit from petrol would offset to a certain extent the shortfall from its projected revenue from the oil industry. In doing so, the govt is actually imposing an oil tax on the consumers! This is in effect adding insult to injury of no 30 cents subsidy!
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- Time to slash the petrol price
- Time for fuel prices to come down
- Gov’t must account for premium on pump price
- Subsidy? What subsidy? Aiyah, I don’t understand-lah…
- Petrol price - subsidy, levy or free float?
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Sorry, I am a proponent of fuel tax. As such, I think RM2 is fine.
I seriously feel that the additional money made by the Government should be channelled to a better public transport system. As long as there is a comprehensive plan, then we should pay more to keep cars off the road as much as possible, with higher fuel prices. That includes me.
Also to note that the more the Government tries to keep express buses fares down, it will only lead to a bigger mess, with more accidents and poorly maintained buses. With Nice, the KUL-PEN fare is RM62/one way. Almost all the trips are near full, as there are people who are willing to pay for the additional safety and comfort. Even the PlusLiner buses at RM35/one way are very popular.
If as reported, the subsidy has now become tax revenue on the pump price of petroleum, therefore suggesting that it had always in fact been forgone government revenues (subsidy). Why cant the actual composition of the retail petroleum and diesel pump prices be declared once and for all?
There is no shame in showing what the taxes and duties are worth, the UK retail prices includes roughly 70% duties and taxes, South Africa between 26% to 30%.
It is sadly however a shame to watch our parliamentarians losing their traction in the spin they have been propagated.
Food and other items prices NEVER decreasing in same or higher rate than the petrol price reduction.
Many controlled items are fixed articially low prices before the petrol price hike, unlikely producers are keen to reduce price in tandem with the petrol price.
Dont waste time on analyst on the chart .. is useless .. the gomen onl y think of themselves , petrol high dont want to subs, increase the price, now petrol low , no income still sucking our money ..
remember , when the petrol go up , lots of unknown NGV shops appear and who own this NGV shops .. if price go down somemore sure no income adi for the cronies ..
How come now suddenly the Gov wants to have a floor price of RM1.92? When oil was peaking, they promised to have a mechanism to follow world prices. They argued that they cannot afford to provide subsidy and all that. They raised up prices.
Now when oil is low, suddenly, they want to put in place a floor price. A bit unfair.
This is singing a different story. Double standards.
No need to stimulate the economy with oil money. Just go and catch the big crooks who are stealing millions and billions. Deal with corruption first, then all will fall into place well.
Malaysia is one of the richest countries in the world. Abundant with natural resources. There was and is enough wealth for everyone. Infact, we could have been on par with Singapore with regards to the standards of living and remuneration.
But due to a few individuals who are mega corrupted, everyone has to suffer. They believe in stealing “billions” and not just “millions”.
Due to mismanagement of the economy and corruption, inflation has set in. Everything has become expensive.
Don’t rely on petrol revenue to sort this root problem. The root problem is corruption and croynism, nothing more, nothing less.
Sort the root problem first, then we will be on our way to be a first world.
You are absolutely right, Anil. That’s the kind of price we should be paying for the petrol now, given the present USD per barrel price. However, on the food price issue, I have only read about Malays and Indians (Mamak mostly) traders lowering their food prices in response to the government advice. But you never hear anything from the … Chinese traders talking about bringing the prices of their food down now that the petrol price has come down so much. I guess for them is “once goes up and never comes down!”. Bloody greedy…! And I am ashamed to be a Chinese!
Anil,
By the price table that you published, it should be around 1.6. And cost in the factor that we were oil producing country, I think the proper price would be 1.4
Just dream lah for the price under Barang Naik Gomen
Hi everyone,
The recent budget is out-of-sync with the current oil price of US$55-56 per barrel.
If the govt does not review its budget based on current situations, we can expect the govt to maintain the price of petrol at RM1.92 to RM2. The extra RM billions obtained from no subsidy plus sales profit from petrol would offset to a certain extent the shortfall from its projected revenue from the oil industry. In doing so, the govt is actually imposing an oil tax on the consumers! This is in effect adding insult to injury of no 30 cents subsidy!
Based on Sharir’s own words, it should be RM1.40 per litre.
ie:current price RM2.0 minus 30 sen subsidy and minus another 30 sen tax.
In any other countries, I think oil should be taxed and heavily due to the health and hazard costs and the finite character of the resource.
However, seeing the massive leakage Malaysian tax money is spent on, I would argue oil should be heavily subsidised as public money is spent on useless binges, such as the angkasawan and other fluff.
Yes , we are certainly paying more for petrol- not in tandem with plumetting global oil prices.
The earlier 30 sen promised subsidy is abandoned and just when we thought we could gain if oil prices
plummet further, Sharir Samad is insultingly mulling “floor prices”.
Sharir is also reported to have said that if drastic cuts are made suddenly petrul stations and dealers will suffer,
on the otherhand it was OK for them to reap bumper profits when they increased prices overnight.
baffling ? not really- allow me to share my simple minded theory:-
Who are these petrol station owners ?
The vast majority of petrol staions in the country are owned by UMNO members, their cronies or proxies,
who (probably) contribute much to UMNO war-chests and … have sway over how UMNO delegates vote.
The leadership do not want to offend this group, more so when UMNO party elections are in progress.
Its not about the suffering rakyat its about immediate political survival.
Of course not to mention finding surplus at the Federal Level to partly finance
an ill conceived expansionary budget.
They just hope that the rakyat will forget this come next general elections.
Dear Sir,
Anybody who goes to petrol stations esp. Shell would notice that there is a big billboard (still up there!) showing the rationale of the pump price hike of 26/02/06 from RM 1.62 to RM 1.92!
It was displayed that at pump price of RM 1.92 the govt was subsidising RM 1.01!
Which figure is a big LIE??? present or past???
then,when the price of petrol went up to 2.70,tis aab and white hair guy promises us that the govnment will at all time subsidice us .30cts per liter.but now crude oil has come down so much and they have now turned back on their word,and worst still they intended to put a base ceiling price and they ask us to subsidice the govnt instead.This … liers!!!Wait for the next GE!!
This is a systematic corruptions and blood sucking from the goverment. It should be around 1.4, it’s clear cut the gov is robbing the people …
Hi, just to clarify on how effective petrol price is computed
Crude oil is not a valid comparison as it doesnt account for refining cost.
Please use the global RON 97 per barrel (159 litres) price that is available on bloomberg with ticker MOGFC97S Index, which currently is at USD 48.95 (USD 1 = RM 3.6 now).
So effective cost of 1 litre of petrol is:
48.95 * 3.6 / 159 + 0.12 (dealers margin) + 0.15 (oil company’s distribution cost and margin)+0.05 (gov’s goodwill to dealers to compensate losses on price drop) = RM 1.43
Total consumption in the country is 600,000 barrels a day. which means GOV could be making up to RM 54.4 mln a day, or 1.6 bln a month by keeping price above RM 1.92 going forward.
If the government based its Budget on the previous high price of oil, then, it is Negligent. Only this word can describe the whole situation.
Oil is a commodity, which goes up and down, like a Yo-yo. The Government should not take such a risk to come up with a Budget based on high oil prices.
Sheer utter negligence. It does not take a clever person to know that it was such a high risk to assume oil would always be above US$100 per barrel.
The government should have forsight since it has briiliant brains formulating the Budget.
Now, we know what kind of economist and financial experts there are in the government.
There is absolutely no excuse to come up now and say that the government now needs to make money from the fuel to rectify the Budget.
And the best part, we are actually letting this supposedly competent people run our country?
So are we still supposed to pay for this negligence?
I don’t mind paying 1.90 per liter, but only if that extra money is going to fund public transport. It seems fair to pay a sort of tax for clogging up the roads and polluting the air with our cars, but only if that tax is going toward improving public transport so that we have the option of not using our cars and not paying this tax. I don’t want this extra money going toward anything else, because it’s not going to be spent wisely and it’s most likely going into someone else’s pocket. Why should we prop up their sorry excuse for a budget and their failure to plan. If we let them tax us and carry on as before, they won’t have to come up with better ways of making up for the revenue they lost. They’ll just keep up the same old inefficient system they’ve always had because they can now force the citizens to pay without any accountability. Tell you it just burns me up!
kensthoth
what does the govt want? come clean and tell the public whats the indiret tax that is being levied. sure, i dont disagree with you on the merits of a petrol tax to encourage public transportation. but is the govt policy consistent with that?
for one, there is lack of focus in improving the public transportation. its main solution to resolve traffic jas is to build more tll roads so as to enrich ts cronies.
two, why try to develop the car industry by encouraging ownership? why give tax incentives for national cars ( ie. minis to make it very affordable for the masses)?
The above shows that indirect petrol tax is not a policy matter but one way to raise reevnue to plug the big hole arising from the commmodity bust.
Wrong! Anil. Wrong! The government do not need to come out with new budget. When the world crude oil price go down, Petronas actually make more moneis. Remember Jeffery Kitigan’s revelation about our oil selling to 6 option holders. The price should be about $70 per barrel. They are making huge profit, yet treat us like a fool by making us pay more when the price of petrol should be RM1.60 per liter.
why we must follow world market price when we are producer and exporter and NOT NETT IMPORTER!
we are NOT even member of OPEC!
I ain’t no idiot like the proponents of fuel tax. I just can’t imagine there are such idiots around. Its like a “Ah Too” or “Ah Beng” talking. Anyway who the … give that white haired Dato … to just decide that we should all pay market price and then suddenly now he decided again that we should all pay fuel tax.
Both are equal idiots except that one is more idiots than the other.
malaysians continue to be sodomising by BN government upside down and inside out…
…
The Pump price should fluctuate with the fossil oil price, that’s what the Prime Minister decreed. So let it be.
The political King’s word is the Law.
Cheaper pump price can prevent Malaysia from the possible 2009-2010 economy slow-down, becoz the People can afford to be mobile and active. This will spur production, growth and pro-activity.
The Government’s coffer shall be fattened by corporate and personal income tax and all sorts of expenditure taxes.
Deny the troops water and the war is lost. Offer the troop too much beer and the war is also lost.
To win the war give the troops enough water to drink and enough rice to eat.
They will find their own fish and meat to eat once the war is won.
GDP growth is Nation-wide involvement.
Now, it is our turn to subsidise Petronas. Otherwise, no bonuses for their employees and hanger-ons.
Looks like when they mentioned about a maximum of 30 sen per litre subsidy for the rakyat, they actually meant to charge us a max of 30sen premium.
Some brainless idiots that I have come across told me it is ok as the government need the funds for development. How ignorant!!
We have the most “creative” politician in the world! They know how to “use” those money. So no worry. Besides, this is the last chance for them to get as much as possible before the next GE. So don’t blame them not able to lower down the patrol price. After that you will see all of them migrate to oversea and having banglo in various countries. Malaysia Boleh!!
where the hack is our 30 sen subsidy??????
I’m wondering..pakatan can sue the white haired Dato…. he made public on 30 sen stuff… and now he broke the promise…he already broken the law as when he made public, contract had been established ( remember read it somewhere about law stuff)…. so, DAP, PKR, Pas…..u know what to do….got so many lawyer there….
Did anyone mention RM625 cash rebate? looks like everyone forget it.
have you considered movements in MYR/USD also?
the exchange rate is RM3.8 to US$1. Now the rate is RM3.4. Therefore the actual price should be lower than the price on the chart
If the government all these years had been sincere to the public without hanky panky or imposing OSA whatsoever in their decision making where everything was opened up under broad daylight for public scrutiny, we wouldn’t be here today arguing what is the fair value for the fuel price. Seems like now the government is getting very careful and confuse instead in disclosing the fair value for the fuel price and fuel subsidies as there were simply too many hanky panky and hidden hands behind the scene manipulating the figure and now everyone is confuse what is the fair value; to the extend of LYING to the public when the fuel price going to drop! …
Hey En Sharir, tell us straight in the eyes what is the fair figure and what are the basis. If you intend to carry on this type of hanky panky policies or culture in the government decision making, for sure you and your gomen will not have good night sleep in the coming days. Rakyat are getting smarter each day in the internet age.
ps: In the first place, Pak Lah should not have raised the fuel price by 40% in one shot. Tell us which countries in the world can withstand KO punch of 40% raising in overnight fuel price. Biggest blunder of the yr in Pak Lah administration and they are asking people to drop price overnight?! In your dreamlah Pak Lah!
it was stupid of badawi 2 raise petrol price hastily by 40% - now price of things will not come down - we must thank tidurwi 4 that
shahrir - i have no more respect 4 u - u have lost yr principles; now u r just another of their ministers - no more fighting 4 d people, only 4 umno
i can c d difference between u n zaid now - where is d shahrir who resigned from PAC on a matter of principle?
u should be fighting 4 a ceiling price not 4 a floor price-if u r the same shahrir who dared 2 go against mahathir 4 yr beliefs
if pakatan rakyat reduces the petrol price 2 fair level n gives back the petromoney 2 the people , there is no way barang naik bn can win back the govt from pr
rakyat , remember that the barang naik bn govt has NEVER ever reduced petrol price in its history
the reductions now r thanks 2 a strong opposition
see the benefits of a strong opposotion that we have been missing 4 50 yrs
i never believed mahathir when he said that malaysia does not need an opposition
What about electric tariff? It should go down too right?
Public transport need to be improve but security of the area also must be consider. How good the transportation provided but if the consumer feel not safe to travel around also will not solve the problem.
old price was subsidized, price now is not. that explains the difference. no big deal here …