Time to slash the petrol price


I think it’s about time we slashed the petrol price, don’t you think?

When the price of petrol was increased from RM1.92 to RM2.70 – a hike of 41 per cent – on 5 June, the price of Nymex Light Sweet Crude was around US$125 per barrel (on 4-5 June).

The current oil price is around US$56/barrel, which is less than half of what it was at the time.

And yet, after three four reductions, our petrol price is still RM2.30 2.15 – nowhere near the RM1.92/litre of 5 June, when the price was US$125.

Even if we take the price of RM2.70 at 5 June, a 50 per cent reduction in line with global prices would be RM1.35/litre – certainly not more than RM1.90. It’s time for a sharp drop in pump prices.

But the most we can expect from this government is a 15-sen reduction to RM2.15 2.00/litre, which will not have much impact on overall domestic demand/consumer spending unlike the sharp rise earlier. Neither will it be able to reverse the rise in food prices as a result of the sharp hike earlier.

A sharper drop in petrol prices, on the other hand, would stimulate domestic demand and local economic activity. It will also give traders and transport operators no excuse for maintaining high prices and thus lead to lower food prices.

Of course, such a sharp reduction in oil prices would have implications for our worsening budget deficit. So the question that arises is what happened to the extra revenue the government earned when fuel prices were soaring?

That said, the danger of slashing oil prices is that we might lose sight of the need to improve our public transport, to encourage fuel conservation and to explore alternative energy sources such as solar. Despite any price reductions, we must maintain our resolve to improve in these areas.

In the long run, we still have to move towards a more sustainable domestic-driven economy.

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moaz yusuf ahmad

I wonder how many people are aware that we already pay taxes on our petrol? Apparently, the government has forgone that tax revenue and added a subsidy in the past (first time I have been able to write that) which brought down the price of petrol to “reasonable” levels (although, to my mind the price levels are unreasonable for Malaysians who earn less and pay higher prices in general). Now that the government has admitted that it has not been paying subsidy, the questions are mounting. 1) Why didnt they tell us? 2) Why didnt they tell us? 3) Why… Read more »


dun ever believe that … sharrir says …. should not be a minister at all. resign … dun make a big fool yourself, … hear this, RESIGN…


There should be a chart Crude Oil Vs Pump Price for people to see where the price should be, base on world crude oil price.

I don’t think it’s that dificult.


fungus, nothing puzzling. the govt needs the money to plug the deep hole. even if world crude drops to US$30, petrol price will not drop proportionately. simply, the govt is in dire straits. why? the revenue projections is based on US$125 per barrel! imagine at US$30 per barrel, whats the dang shortfall. UMNO needs to feed its supporters. where are they going to find the money? simple, just introduce an indirect tax via higher petrol price than what it should be. At least, Sharir came clean with his latest clarification. By the way, if world crud egoes up to US$125… Read more »


They still treat the rakyat like fools because the car prices are still very expensive as compared to the South East Asia neighbours.

With the high vehicle taxes imposed in Bolehland, the petrol price should be much lower, since the rakyat are being forced to fork out more money to purchase a car.

The pump price should be RM1.20 per litre since the crude oil price has dropped to below USD 55 per barrel.


A commodity bust? A credit bust yes, not a commodity bust.

It’s only a correction in a secular bull market. Much higher prices are inevitable (although they might be low for the near future).

The market pricing of petrol is exactly what should be done. It would pacify our great mathematician commentators by having lower prices, and get them to start funding a viable energy conservation program.

But maybe the first thing we need is a cabinet with brains instead of mouths. Is Anwar’s plan still on?

tan, tanjong bungah

Hi everyone,

Domestic Trade and Consumer Affairs Minister is quoted as “Even if prices return to RM1.92, we will still have a bit of surplus,” he said, adding that subsidies had disappeared once the global price of fuel had dipped under US$65 per barrel.

So, it seems that, instead of subsidy, the govt is making a ‘substantial’ profit from selling petrol at RM2!

What happens to his promise that whatever the global price of oil, the govt would subsidise the Malaysian public 30 cents per litre?

Boon Yeow

Dear Anil,

Someone did a chart to compare the two trips overseas by the previous and present state government.

Can we have a chart with dates with the price of petrol with the price of oil per barrel.

Sometimes words get in the way


I would like to believe the present government will not be so proactive in doing all this (so-called) activities (reducing prices of essential goods ie: fuel and ect) if there is no pressure from the opposition. The main reason is that they (ministers) won’t feel the pinch as they spend dirty monies rather then the rakyat who earn the hard ways.


Just as I had suspected! KUALA LUMPUR, Nov 18 — Domestic Trade and Consumer Affairs Minister Datuk Shahrir Samad revealed today the government has stopped subsidising fuel since Nov 1 and been collecting taxes instead on all fuel sales. Speaking to reporters in Parliament, he explained that even after the 15-sen drop today, which saw RON97 petrol dropping to RM2 per litre, and RON92 and diesel down to RM1.90, the government was no longer subsidising fuel at the pumps. “Even if prices return to RM1.92, we will still have a bit of surplus,” he said, adding that subsidies had disappeared… Read more »


The new pump price for RON97 is now RM2 per litre while RON92 will be sold at RM1.90 per litre. Diesel will be at RM1.90 per litre.

now i’m waiting for the the price of goods to be reduced.govt have to monitor “bad business people” who are reluctant to reduce their price.some NGO had also sperheaded the campaign to boycott any outlets that refuse to lower their price.


Anil you notice or not “Chain impact is only upwards not downwards”.

The bus fare(Express) was up 30% surcharge since Hari Raya month & suppose to be back to normal. I’m still being charge the 30% surcharge today even though the price is down. I just arrive KL this morning from Penang.

One more thing, the Penang hockers are too much when the fuel price up all go up, Now what? I think we should bycott these selfish hockers, who don’t share the fruit with others.

Don’t forget Makkal Sakti(People’s power) can do.



by keeping petrol prices higher than what it should be, the govt is actually imposing an indirect tax, extra revenue critically needed to plug the shortfall arising from the commodity bust.
its like heads the govt wins tails the people loses.
thats no way out unless the govt stops the leakages. but how can this be done when the country is managed by UMNO which is known to be a deeply corrupt party.I really dont see how we can get out of this quadmire unless the corrupts are kicked out from misappropriating the limited resources.

Sam G

Good point raised by Anil… on losing sight to improve public transportation and develop alternate energy sources. I strongly believe that in the long term, Petrol should not be subsidized, and the subsidy should be used to also improve public transport system throughout the country. If you can afford to buy a Guzzler, you can afford to pay for higher fuel prices. Why should the poor subsidize the rich???

oil price

Petrol price in USA averages USD2.087/gallon.
USD2.087 X RM3.58 = RM7.47/gallon
1 US gallon = 3.7854 litres
Petrol price in USA in RM = RM7.47/3.7854 = RM1.97/litre (Nil subsidy).
Petrol in Malaysia with RM0.30 subsidy = RM2.00.

Perhaps our Information Minister and Shahrir care to explain why subsidied petrol is more expensive than non subsidied petrol.

Tan Jo

“Even if we take the price of RM2.70 at 5 June, a 50 per cent reduction in line with global prices would be RM1.35/litre – certainly not more than RM1.90. It’s time for a sharp drop in pump prices.” In your reasoning, you forgot to include the component of the price that is subsidised by the government. (Assuming that the subsidy is flat rate, the fall in world petrol prices should incur a more than proportionate fall in petrol prices – unless the subsidy is quoted as a percentage of world prices.) Of course, if you still remember, when the… Read more »

Johnny Cheah

It’s time the Pakatan Rakyat people do something in Parliament about the pump price of petrol. Big increase of 78 cents and slowly decrease by 10 cents and 15 cents when price of petrol is below USD60 per barrel. If you look at it, the BN government is actually playing masak masak with the Rakyat. After 4 or 5 times price reduction in pump price, have prices of other things that the Rakyat use daily also drop in price? Who is to be blame for this fiasco, our great Prime Minister and greatest economist in the universe.

Ong Eu Soon

Betting on the short memory of Malaysians, the government once again try to please Malaysians with further fuel price reduction. If we review the historical data of fuel price from 2000 up to June 5 2008, you will realise that you have been cheated again, current crude oil per barrel is around $56, based on past record we should ask the government to reduce petrol price to RM1.62. That is the price I believe Anwar Ibrahim, once assume the post of PM, will declare. Year Petrol Crude Oil per barrel 05-06-08 RM2.70 $120 26-02-06 RM1.92 $63 30-07-05 RM1.62 $57 05-05-05… Read more »


I recently read a blog by an individual who actually gave calculations as to how much the price of petrol should be. Finally I am able to understand the so called complex calculations of petrol in Malaysia! http://shamsuliskandar.wordpress.com/2008/11/01/terima-kasih-harga-minyak-turun-rm-015-tetapi-amk-gesa-turunkan-harga-minyak-sinar-harian/ Shockingly, we are actually paying RM1.00 more per litre and this money goes freely to the government. According to the blogger, one barrel of crude oil can produce of 159 litres of petrol. The price of USD56 per barrel should be calculated with 3.5 being the exchange rate of the US dollar to Ringgit Malaysia. The total should then be divided with… Read more »


so are we now subsiding the government for the petrol??? that’s a nation with petrol export??? our MPs must bring up this issue to the parliment!!! it could be a brutal blow to the BN/UMNO!!! the whole malaysians will despite them more and wanna see the change immediately.


With all the political bickering amongst the political parties and also by the general public, everyone has forgotten about the petrol issue. In June, the government, in all its brilliance and intelligence, increased the price of fuel by 78 sen to RM2.70, justifying the increase to the increase of world crude oil prices to US$147 a barrel. However, now, crude oil has fallen to US$56.53 a barrel. Using my Standard 4 mathematics, if crude was at US$147, and the price of petrol went up to RM2.70 a litre, now, if crude oil has gone to more than half its value,… Read more »

Kok Keong

Also, where are the “experts,” whose mantra is a free unregulated market? They made so much noise opposing government subsidising petrol price at the pump when the global price went up? Why are they quiet now, hardly making any noise about getting the government to lower the price to reflect the global market?

Dalbinder Singh Gill

Hi anil,

m part of the organising team for the interfaith religious forum on HIV.. hope u can publicise it on ur website .. u r the moderator on the forum day rite.. thanks..

Dalbinder Singh Gill

Hi Anil,

m part of the organising team of the interfaith forum on HIV… hope u can publicise it on ur website as u r the moderator for the forum. Thanks…