It’s a jungle out there! Oil price hike madness…

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I was stuck in a massive jam after I went to pick up a friend from the Penang airport. No matter how hard I tried to avoid the petrol stations, it seemed like the whole of Penang was out on the streets looking for oil, before the price hike at midnight.

While listening to the radio, I heard one caller phoning in to the deejay and saying something to the effect of, “Here I am stuck in a jam on the way to a petrol station to fill up. I wish I could stay at home like my friend Mr Abdullah and shake legs cos he doesn’t need to go out and fill up.” It took me a couple of moments to realise that he was speaking about the PM! Even the deejay responded, “I would rather be like your friend Mr Abdullah”!

This, then, is the shape of things to come. A 40 per cent hike in petrol prices plus a 20 per cent rise in electricity tariffs. Welcome to the free market and the “brave new Malaysia”.

The experts who advised on a 40 per cent increase figured they would give tax rebates to those with smaller cars.

But what about the makciks and pakciks and other retirees in the market staring at higher food prices, sparked by the latest round of oil prices? Who will help them with their food bills and higher bus fares? They do not all have cars, you know. Where are their rebates? If the private electricity corporations can get massive amounts of subsidised natural gas – why not heavily subsidised education and health care and food for ordinary Malaysians?

No one is saying that the price of petrol cannot be increased. Sure, the rich should pay more for the petrol they consume. It might even encourage fuel conservation. But this increase is way too sharp and will cause tremendous burden to the poor in terms of the knock-on effect on food and other essential items. And there is more to come? God help us! A gradual price increase spread out over a couple of years would have been much more tolerable.

The government must now tell us – and I am dying to know – what Petronas’ profit for the year ended 31 March 2008 is. Please tell us. Even if the final figures are not available, the preliminary figures should be out by now.

The profit before tax for the full year will probably be in the region of RM80 billion (on the back of revenue of RM200 billion) if the results of the first six months are any indication:

FInancial period Half year ended 30/9/2007 – HY ended 30/9/2006 – % Change – FY 31/3/2007
Revenue RM102.9 bil – RM88.8 bil – 15.8% – RM184.1 bil
Profit Before Tax RM42.3 bil – RM40.1 bil – 6.2% – RM76.3 bil

Check out the summary accounts here.

Also, have a look at this:

Revenue Transparency
  • HIGH: BG Group, BHP Billiton, Petro-Canada, Shell, StatoilHydro, Nexen, Petrobras, Talisman Energy
  • MEDIUM: BP, Chevron, Conoco-Philips, Eni, Hess, Marathon Oil, Repsol, Total, Woodside
  • LOW: CNOOC, CNPC, Devon Energy, Exxon-Mobil, Kuwait Petroleum Corp, Lukoil, ONGC, Petronas
Source: Transparency International, reported on BBC, 28 April 2008

Now, this is supremely ironic. Petronas can’t turn around and say Transparency International is biased because Petronas itself in the past has funded the operating expenses of the KL Chapter of Transparency International, otherwise known as the Kuala Lumpur Society for Transparency and Integrity! I suppose the irony is lost on Petronas. So why not transparent? What has it got to hide? Show us the detailed accounts!

We are repeatedly told that subsidies bad, very bad for you, my child. It distorts the free market-lah. You want to talk about subsidies? Let’s talk about subsidies. Tell us how many billions of ringgit in subsidies have been given to the IPPs in the form of lop-sided power purchase agreements that have enriched a small coterie of well connected tycoons and their firms. The business weekly The Edge once identified the IPP beneficiaries as Genting Sanyen Power, YTL Power, Malakoff Bhd and Tanjong Plc/Powertek Bhd. “These companies are controlled by the families of Tan Sri Lim Goh Tong, Tan Sri Yeoh Tiong Lay, Tan Sri Syed Mokhtar Al-Bukhary and Ananda Krishnan, four of the richest families and individuals in the country,” the paper pointed out back then. See also: Petronas oil profits slip away

Tell us how much in subsidies has been dished out to bail out the banks over the years. And let’s not forget 1998, when Petronas, through its shipping carrier Malaysian International Shipping Corp Berhad (MISC), acquired a debt-laden shipping concern, Konsortium Perkapalan Bhd (KPB) in a deal some analysts felt amounted to a bailout of Mahathir’s son, Mirzan, whose KPB was then floundering under debts estimated at about RM1.7 billion.

Tell us how much of Petronas funds was used to subsidise the development of Putrajaya.

And does Petronas still want to subsidise the Formula One racing team and the National Philharmonic Orchestra? Going by free market “user pay” principles, the F1 spectators and classical music fans should absorb the full cost of running the racing team and financing the orchestra, shouldn’t they? Or do the country’s elite prefer to listen to subsidised classical music while the people suffer? Instead of saying “let them eat cake”, they might say “let them listen to classical music.”

Perhaps CDs of the Orchestra’s classical music could now be distributed to soothe the frayed nerves of Malaysians feeling the burden of the soaring cost of petrol, utilities, food, tolls and medicine.

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ANGELINE VONG

WHAT WAS WRITTEN IN TN THE ARTICLE IS ENTIRELY TRUE. I PRACTICALLY
HAVE TO BUDGET MYSELF MY MONTHLY EXPENSES SINCE THE PETROL RISE TO KEEP UP WITH THE RISING COST. COST OF LIVING ALSO HAD TO BE CUT DOWN BECAUSE OF THIS REASON. HOPING THE GOVERNMENT CAN FIND A WAY TO HELP US. CHERIO FOR NOW.

Valerie

The so-called experts sitting up there “crunching” away at numbers and finally deciding are not getting their brains used correctly(got brains ah?). You do not make a management decision without thinking of the implications – good or bad that will be affected by that decision. Stupidos! These so called decision makers I bet never been to the interiors of Sarawak (where 50% of the people/voters)rely on river transport for their food/travel/sending children to school…..these poor folks do not own a proton for goodness sake – how do they get this special consideration called a ‘rebate’??? Sheesh, BN may have just… Read more »

Real G

THIS WHOLE THING ABOUT INFLATION AND THE RISE IN PRICES OF ANYTHING IS ALL ABOUT THE BIG GUNS AT THE TOP AND HOW THEY ARE FOOLING WITH US. IMAGINE IT THIS WAY, ECONOMICS IS OBVIOUSLY CONTROLLED BY THE WEALTHY AND NOT THE POOR, OTHERWISE THE POOR WOULD BE THE WEALTHY ONES OF SOCIETY.PRICES JUST DON’T GO UP, SOMEONE MAKES THEM GO UP AND WHOEVER IT IS IT IS DEFINITELY FOR NO REAL PURPOSE BUT TO GENERATE MORE MONEY. EVEN THOUGH IT IS THE POOR WHO MAY WORK OUT THE MANY DIFFERENT EQUATIONS UPON WHICH THIS SCIENCE OF UNJUST PROFIT IS… Read more »

Phua Kai Lit

Dear Mr Anil,

Your articles and analyses are always of high quality.
Congratulations!

One possiblity for the drastic price hike:

To use the revenue generated from the drastic price hike as funds to spread around and buy political support (so as to ensure political survival).
In other words, voodoo economics but Machiavellian politics.

Phua Kai Lit

Param

Hi Anil,
You know something…Mr Samy wants the petrol price hike to be RM1 but its only 78 cent. He was very upset because he couldn’t hit the target.

PMelur

Yes, he has no brain. Now the Rakyat are affected. We have already felt the burden. The hike in oil prices will definitely has a chain effect….more to come..increase in transportation fees, crime rate, cooking oil, our favourite malaysian food nasi lemak and roti canai, people end up very stressful etc. Can he elaborate what he meant by Cemerlang, Gemilang and Terbilang?

hkengmacao

“lf the private electricity corporations can get massive amounts of subsidised natural gas – why not heavily subsidised education and health care and food for ordinary Malaysians?”

Anil, go ask Mahathir, the IPP contracts were signed during his time.

Sabahfan

Thats very right Anil… UMNO tells us suffering rakyat… “CHANGE YOUR LIFESTYLE” wHat more changes can I do Anil? Here are the list to things I dont do cos I cant afford them. 1. play golf 2, smoke 3. drink alcohol or beer or anything of that nature 4. own a merc or proton wira 5. own a bungalow 6. join any club 7. eat even at low class restaurant 8. Own a streamyx..(sorry i go to cybercafe to contact u guys) so what more changes can i do? stop or reduce eating to once a day? any other suggestion… Read more »

Enforcer

Well, well done! What a lot of brilliant goons we have here in the M’sian parliament! They can come to the final figure for price increase in 48hrs(40%) And we wonder who the expert here that come to that conclusion ( the brilliant KJ?) Only decisions that benefit the ‘elite’ few and their cronies can be made in a flash! Other problems of the rakyat are term as irrelevant, not valid, no proof, are looking into it and what not they can think of cos’ it eats into their pockets! If the billions that can be saved from this exercise… Read more »

Anak Pulau Pinang

The govt has said that vehicle owners will get a rebate of Rm625 per annum to help them come with the new price increase on petrol. Big Hairy Deal! While the Rm625 will help to reduce the ‘pain’ of the price increase in only a very small way, what does AAB and the govt have to say about the expected price increase of products and services as a direct result of the increase in petrol and electricity. The Rakyat will be hit very badly this time and yes while it might just be an ant’s where the rich and the… Read more »

Su

Are we the first country in world to float fluel price?

ahmad

(They are) sucking our nasion oil reserved.
They are (allegedly) using the saving on fuel hike to divert the money to Iskandar Region. BN has committed to foreign investors to jointly develop the IR. RM17.3 billions needed to fund this project at the expense of rakyat.
BN only interested in saving their image not rakyat. We suffer for all thing will go up.
Remember come GE13-rakyat to topple the BN goverment. Maybe this is BN final bid before vanish-they have to (squeeze) as many as possible.
BN goverment is irresponsible goverment.

Mr Smith

I just can’t get it. This is political suicide but why did he do it? Is he instigating the people to revolt? If so why? He could have increased the price by say 10 sen on March 9, 15 sen in April, 15 sen in May and 20 sen in June etc etc. The adjustment would have been gradual and the anger controllable. In any case, Anil, do you know how much is spent of the PM’s jet and residence. At no time after the last hike did the PM, his deputy and cabinet members ever indicate that they were… Read more »

crower

That’s “Cemerlang, Gemilang, Terbilang” for us folks !!!

eddiecnw

if PR taking over, will all this problem go away?can they do everything that they have promised?hmm..

kenl8888

Brilliant move by Abdullah as now nobody will dare to hold the post of PM in a very unpopular government which will undoubtedly be ousted in the next election.. in the meantime just collect as much as possible; why does he cares .. he may not even be around by the the time of the next election.. Too bad though for MCA, MIC and Gerakan.. they better abandon ship now or sink with it come the next election..

raj raman666

Anil,

maybe after all ,i must aggreee to Mahaguru 58.
He have the data regards the oil price per liter on oil producing countries.

FINALLY TUN MAHATHIR BECOME ALSO BECOME MALAYSIAN IN ONE VOICE.(check it out myself finally in his blogs with out leaving comments)

check it out.

Raj raman666- pay the credits due whenever dues,i dont own any credits cards debt.

DO THE GOVERMENT KNOW- this country economies is stagnant other than oil,rubber and palm oil?

Andrew

Good one, Anil. Let them listen to classical music. Also, let them watch cars going round in circles, chasing after each other’s egos.

Laila

Geram, Geram, Geram betul aku geram! Mana keadilan. Kerajaan tipu, kerajaan palsu!

darcwil

Abdullah did mention he’s not doing it for the popularity. Which he aint getting for sure. But if it is really for long term benefits, it is indeed a bold move by him. And yes anil, I do agree the subsidy savings can be used for things that all the Rakyat can benefit from. Like food stuff. All malaysians can enjoy food subsidy, but not everybody can have a share of the fuel subsidy.

raj raman666

Mr.anil, Day by day u getting bolder and sometimes as a joker in beetween. What increace ? – we still cheaper in the region. What inflation 5%? – 20 ringgit item become now more than 30ringgit.(rice) What increase? – actually everything decrease in spending power. As one of my customer said (foreign finacial analyst – Malaysia have everything accept brain) rajraman – stayed home last night although my car tank empty because i worried all the traffic jam i mights to push my car to the petrol pump and 2day my phone on bar mode because no mood already to… Read more »

Samuel Goh Kim Eng

It’s not easy to figure out all the financial figures
Made partially known selectively to the general public
For it’s difficult to point out with our own fingers
How money is spent in manners invisible to the public

(C) Samuel Goh Kim Eng – 050608
http://MotivationInMotion.blogspot.com
Thur. 5th June 2008.

oil man badawi

Come on lah, Badawi has not lost his plot. This oil price increase is brilliant political move. Election not due for the next 4.5 years. Extra cash revenue per year RM56 bil (RM1bil =RM1,000 mil) so it’s RM56,000,000,000,000 we are talking about. Definitely enough to retain those 30++ MP who want cross over to Pakatan with lots of change. DSAI’s Pakatan in deep trouble now, unless snap election is called. Now only DYMM Agong can help Pakatan. Also, if lost snap election (very unlikely) they can also grab a few bil before they make their exit. Brilliant very brilliant move.… Read more »

slug

Saya tak ada masalah dengan kenaikan minyak (still quite piss)tapi yang paling marah adalah PENIPU!!!

Dah berapa kali kita kena tipu? Hari ni cakap tak tapi esok bammm!!! Terus jadi. Tak ada penjelasan apa pun. Minta maaf pun tak ada. Ini ke sopan santun orang melayu?

Hasbullah Pit

rebet RM 625 bagi saya tak memadai,
Akan tetapi saya tak mahu desak kerajaan untuk naikkan rebet itu, kerana sebarang kenaikan rebet itu tidak memberi kesan kepada golongan miskin tak berkenderaan.

Oleh itu, saya minta jasa baik pihak tuan untuk promotekan gerakan mendesak kerajaan untuk memberikan subsidi makanan untuk setiap rakyat Malaysia yang diambil daripada penjimatan akibat kenaikan harga minyak, (saya anggarkan penjimatan lebih 20 bilion)

RM 50 seorang 13.8 bilion setahun sahaja.
Jemput baca:
http://sebolku.blogspot.com/2008/06/hanya-138-bilion-sahaja-untuk-kupon.html