Key: July prices in red; June prices in violet (Graph courtesy of oilnergy.com)
It looks like the price of oil in Malaysia could be dependent on other factors apart from economic considerations.
Now the PM talks of “streamlining” the oil price from 1 Sept. By also capping the petrol price at the present RM2.70/litre for the rest of the year, the government is now opening up the possibility of a possible reduction in fuel prices this year in the event of a further drop in global prices.
What exactly has changed since 5 June, when the petrol price was raised by 41 per cent?
As you can see from the graph above, the price of Nymex Light Sweet Crude on 4-5 June was around US$125 per barrel. And that was when they raised the petrol price in Malaysia by 41 per cent.
At the end of July, the price was also around US$125. But this time, they are talking of “streamlining” the oil price.
If we look at the average price for the month – for June it was US$134.60 and for July it was $134.42.
So there has been little significant change – from the government’s perspective, that is – to warrant talk of a reduction or a “streamlining” of the price of oil (except that the price has fallen from a peak of US$147 over the last two weeks). Unless the government is now saying it had little justification for raising the oil price in the first place on 5 June.
Abdullah probably couldn’t ignore the oil price issue with the Permatang Pauh by-election looming. The price of oil is likely to be a big issue in the campaign especially with Anwar saying he can reduce it by 50 sen immediately if PR were to wrest power.
So what determines the price of oil – economics, politics… or opinion polls? A Merdeka Centre poll reveals that Abdullah’s approval rating has plunged to a new low (42 per cent) while 59 per cent of Malaysians think that economic problems are the most important issue facing Malaysia today.
That’s hardly surprising. You don’t need a poll to tell you we are in big doo-doo.