The global crude oil price is now US$36 barrel. In contrast, the local pump price is still relatively high at RM1.80/litre – despite a fifth reduction in price on 15 December since a 41 per cent hike in June.
It’s obvious that the pump price is now higher than the real market price; in other words, the higher price is a form of consumer tax (as opposed to a subsidy previously). Now, it is the government’s prerogative if it wants to impose this kind of tax.
But what is it going to do with this surplus?
Will it be set aside in a fund to cover future losses i.e. in case the government decides to subsidise oil some time in the future? Or will the government use the profit for a stimulus package to spur the economy? Or will it use it for research into solar and other renewable energy? Or will the profit be used to finance public transport infrastructure projects?
Whatever the case, there needs to be accountability, transparency and a public debate on how these excess funds are used. So far, there has been little of all three.
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Whiles the discussion centers on fluctuations in petroleum prices, which is no doubt, a fundamental issue affecting society, we seem to have missed the effects of this on the wider world. The apparent ‘fall’ in Malaysian petroleum retail prices has NOT been reflected in a proportionate reduction in prices of basic necessities like food, school uniforms, school shoes, public transport fares etc. If people could literally consume petrol as food, wear petrol and educate with petrol, we’d be much better off. Basic food stuffs like rice are still priced like luxury items. The average earning parent is beginning to find… Read more »
I am currently on holiday in Canada, visiting my family. While here, I took note of the fall of gasoline (petrol) prices. Petrol prices in the Greater Toronto Area (Canada) from Dec 13-present Dec 13-15: CAD 0.755/L Dec 15-24: CAD 0.724/L Dec 23-24: CAD 0.689/L Dec 25 – present: CAD 0.665/L Factor in the current exchange rate, which is about 3:1 and you have a price of RM 1.98/L…but at least 40% of the pump price that is paid in Canada includes government taxes. What this means is that the price per litre without taxes in Canada would be approximately… Read more »
Forget about demanding for and explanation where our petrol money goes. Our eyes can see that being a BN politician is the Fasttrack to Millionaire/Billionaire Club..just don’t stoop to a “Saifool”. With all the profits earned during 2008, govt should just declare 2008 as a tax-free year for all personal incomes. Oil rich countries like Brunei do not impose tax on their citizens, so why does Malaysia a net exporter of oil, need to tax us? Petronas belongs to the PM, not even the Parliament have the right to check its accounts, or to question the Board of Petronas who… Read more »
Corruption is so endemic in the govt that they won’t pass the current low price of oil to the public because they have to fleece the people in order to make unseen contributions to… If they pass on the benefit of lower pump price to the public, then the pile may not be big enough for …
The billions go to UMNO’s pocket. Simple. There’s this 10-12 story high UMNO building in Ipoh next to Casuarina Hotel along Jalan Gopeng. Since the building is already there, our money will be used to upkeep the damn place and pay the people around there to sit around in their lil UMNO world.
Stop smacking the government! When the market price is high, Malaysia as an exporter profiting a lot, and thus, we don’t need to pay the actual market price. Now the market price has dropped and now they can’t get as much as last time and it’s time for you all to subsidies back the government. Fair and Square game. Even if the price go down, The Star reported that the government will impose a tax each time you fill your tank. But it’s okay, let’s us help the government in time of trouble. Conclusion: Market price go up, we pay… Read more »
According to Mahathir’s blog chedet, “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,” said Mahathir. From the above, one can decipher this. 1 barrel equals to 158 litres of oil. So local consumption is 400,000 barrels x 158 litres = 632 00000 litres per day of oil. Setting aside processing… Read more »
I came across a wonderful new phrase – Kleptocracy, meaning Government by/of Thieves.
So, we get robbed when oil price goes up and we get gobsmacked when oil price goes down.
Those who voted them in, make sure you have learned your lesson!!
http://donplaypuks.blogspot.com
Naik mendadak, turun sikit-sikit!! Obviously, without any doubt, the profit will be used to feed the cronies – under the guise of economy stimulus and channeled to favoured contractors who build at an escalated cost. This is the Mahathir lagacy, and we expect Najib to continue to use the same strategy to keep him in power… So what can we do to get the price down? More boycotts? Can Pakatan initiate something? Can you get to LGE and ask him to do something? We cannot be expected to subsidise the govt at this time, when we also know the money… Read more »
Can’t really understand where all those money gone ? With billions ‘donated’ to the ruling regime, why are they still hungry for our EPF money ? Why dip those dirty fingers into our EPF coffer ? Something is definitely very wrong with EPF ways of investment. How can the annual returns be about 4-5% only, whereas fund like ASN is being paid around 8-10% or more ? Who select those board members in EPF and who oversees them in the investment area ? Without paying any more subsidy for petrol, there is so much savings and why allow them to… Read more »
I remember when there were HUGH signboards at petrol stations, erected at the behest of the govt no doubt, which trumpeted just how much the govt was subsidising each litre of fuel.
Are there going to be equally hugh signboards now to inform the rakyat just how much they are paying the govt with every litre they buy?
According to your previous blog posting entitled, “what-should-the-petrol-price-be,” Ong Eu Soon compiled this chart. 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 Petrol should now be about RM1.20. So we are paying extra 60 sen per litre. Multiply that with 42 litres (average car tank), we are paying RM25.20 extra each time we fill our tank. I fill 5 times a month, so I am “donating” extra RM126 per month… Read more »
Merry Christmas Anil,
I have just raised the issue related to petrol, was puzzled how will the govt manage its expenses after the sharp fall of crude oil price. http://chinyauchia.blogspot.com
anil,
I have posted months ago that either way we are doomed. if crud goes up, petrol goes up. if crude goes down, hey petrol wouldnt go down proportionately. this doesnt make sense for a net petroleum exporter, isnt it?
reason? simple. govt needs the money just to finance the operating expenses and to feed the largest civil servants (in relation to the population). Will, dont forget the large apetite of the cronies.
Belated Merry Chritmas to all.
Further reducing pump prices are ok but there should be a celing price in order to control traffic and promote public transport,what do you think ?