The crude oil price has dipped below US$50/barrel. Similarly the prices of other commodities have plunged. Steel prices, for instance, have crashed from $1,200/ton in June to below $300 – and it is likely to fall even further with demand from China expected to weaken.
Now the question is how low can these commodity prices go?
The speculative boom run in commodity prices began in 2001-2002, when oil broke the $30 barrier.
Certain analysts are now suggesting that we are now only half way down the road back to that trough. So commodity prices still have room to fall further and they could continue sliding until the end of 2009. But it is hard to say if oil will approach the $30 region given that it is getting harder and more expensive to find new global oil reserves.
Anyway, I heard on the radio that the government is intending to further cut oil prices.
The more immediate issues are:
Shouldn’t we immediately reduce oil prices to RM1.80 at the most. Why wait?
Shouldn’t electricity tariffs be reduced now?
You know I am against a second Penang bridge for private motor vehicles because I believe it will result in further congestion on the island. (On the other hand, it would be great to have a cross-channel public transport rail link over a shorter distance, perhaps near the present bridge, and an expanded ferry service.)
But then some quarters seem to like all these mega highway and road bridge projects and they prefer not to think about how congested the island will be after 5-10 years, with 5-6 lanes of traffic (from two bridges) pouring into the island.
That said, with steel and other building material prices now plunging, why is the estimated cost for the new bridge still RM4.6 billion, which some people were saying was too expensive even before the slump? Shouldn’t the cost be a lot lower now? Certain firms are going to make some fat profits, I would imagine.
On another note, if only a larger proportion of the toll from the Penang Bridge was ploughed back to Penang, wouldn’t that do wonders for the state and its people, provided it’s not splurged on other ill-conceived mega projects?
Is it true that the Penang state government once wanted to take over the Penang Bridge, but was told it would cost an exorbitant sum to take over? But the bridge concession was later taken over by a private firm to manage (at a lower price?). Perhaps the folks in Gerakan could clarify this.