Wednesday, June 11, 2008

Why Raise Our Petrol Price!

Refer to my previous post of talking about savings your petrol, we are paying it for RM2.70 per liter in our country. Most of us complaint it is too much and expensive. That's relatively okay because we are used to pump in RM1.92 per liter.

I'm not sure whether you already know how much other people paying their petrol in their countries. This is very interesting because some of the countries are having very expensive fuel prices, where some are very cheap, until we couldn't imagine at all. Let's get to know and look at the chart below.

The unit price is based on per gallon.

From the chart above, we noticed the people in United Kingdom, France, Germany, Norway, South Korea and Hong Kong are already paying very expensive petrol. But sorry, the price statistics above was obtained from during May 2007, the prices already hiked about 60-90% from the chart above.

We try look at the latest petrol prices are listed below:
UAE– RM1.19/litre Eygpt– RM1.03/litre Bahrain– RM0.87/litre Qatar– RM0.68/litre
Kuwait– RM0.67/litre Saudi Arabia– RM0.38/litre Iran– RM0.35/litre
Nigeria– RM1.32/litre Turkmenistan– RM0.25/litre Venezuela– RM0.16/litre
China- RM2.35/litre Brunei- RM1.25/litre Malaysia– RM2.70/litre
Singapore - RM5.30 /litre Indonesia - RM2.30 /litre

Most of them listed above are cheap, Venezuela having the cheapest petrol price in the world, RM0.16 per liter. So perhaps nobody care about how to save their petrol in that country. I bet Turkmenistan and Iran also. LOLz.

If we look at the petrol price by continent, Asians and Africa seem like paying a lot more for petrol. Since our country is exporting petrol, we get subsidized from government. Singapore and Hong Kong petrol prices are definitely higher than us, they are NOT export any petrol and they also having higher income per capita than us, so stop compare our petrol price with them (I saw a well-known Malaysian dumb ass blog comparing about them).

It's okay, perhaps lim beh is a dumb ass too. Anyhow, I would like to query our government 2 questions below, or perhaps I better ask for your opinion first, as I don't really understand here. Let's put it to an easier way to ask, as below.

Question #1
1) Petrol in the market 2005 is about USD60 per barrel.
2) Petrol in the market 2008 is about USD130 per barrel.
3) Before RM is floated, if we export 1 barrel of crude, we got USD60 x 3.8 = RM228 in year 2005.
4) After RM is floated, if we assuming the petrol price is remain unchanged, and we export 1 barrel of crude, we got USD60 x 3.08 = RM184.80 in year 2006. We make less profit of RM43.2 per barrel! And today we are even making less profit of RM100.08 per barrel!!! (USD139 x 3.08)
If this is the case, why our government let the RM floated at first? It ruins all the export value. Don't tell me they just want to please International Monetary Fund and World Bank without any benefits like Tun Dr.Mahathir said? I don't know.

Question #2
According to Tun Dr.Mahathir, our country roughly produces 650k barrels of crude per day. We consume 400k barrels and leaving 250k barrels to be exported. From here, there is something I don't really understand here.
1) The reserved 400k barrels supposedly don't affected by market price, and enjoy by Malaysians. Supposedly our petrol price is relatively cheap.
2) The 250k barrels supposedly get export and the profit surging from USD60 (2005) to USD139 (June 2008). It's making huge and huger profit.
3) Other than petrol, other main export items like palm oil, rubber and tin also also making more and more money for the government, why they didn't emphasize on this instead.
Perhaps 20-30 cents is still reasonable. Why our government need to impose the petrol price to that 'high' (78 cents) while it is making more and more profit and some more there is 400k barrels are already reserve for us? Hey, if crude oil raising up to USD250 per barrel one day, you are getting more profit and confirmed you'll need RM6 per liter from us by then? I realizing Mr.Anwar is talking the right thing at the right time.

While we are complaining, our government still plan to hike the petrol price to RM4 per liter. I believe that could be killing us especially the poor. Malaysians used to enjoy cheap petrol all the while, if it is really without rebate or subsidization, that could kill.

Fine. If it is really unavoidable, and our government and our country leader would like to stay long and don't wish to hike our petrol price in 'bulk' again in the future, they better start to think of something effective that can generate better income for the country, instead of just knowing to increase the fuel price while boosting vehicle industry, and cut down the expenses. Beh Tahan!


Complainter said...

WHAT IS NEVER MENTIONED IN Mainstream Media like NST/TheStar/ Utusan/BH are these facts.

Malaysian PerCapita Income USD 5000 VS Singaporean PerCapita Income USD.

Further The Star made a comparison of prices in Thailand ,Singapore and Indonesia. For Thailand it is quoted at RM3.90/liter, however are they aware that in Thailand new cars are cheaper than Malaysia by RM10,000? They pay only one life time for their driving license? Norenewal fee after that? Also that goes for road tax as well? And do The Star also aware that you can drive all the way from Hadtyai to Bangkok on a six lane highway without paying any Tolls ??!!

Whereas here in Malaysia you have to pay yearly renewal for road tax,driving license and TOLLS, TOLLS, TOLLS!!!

For Singapore how can you quote RM 5.20? Please quote in Singapore Dollars because they are earning in Sing Dollars. You might as well say
Europeans are paying RM10/liter. RM5.20/liter = Sing $2.20/liter, still cheaper than Malaysia in view of fact that Singapore is not a crude oil exporter. Are you saying that you fill up petrol in Singapore by paying Ringgit?

In economy, dollar to dollar must be compared as apple to apple.
Not comparing like durian in M'sia is much cheaper than durian in Japan!! Of course-lah, Japan is not durian producer!!! Comparing Malaysian durian with Thailand durian make more sense!!

For Indonesia we might say is cheaper there at RM2.07/liter but compare that to their level of income!

Now, let us compare the price with OIL PRODUCING countries:
>>> UAE RM1.19/litre
>>> Eygpt RM1.03/litre
>>> Bahrain RM0.87/litre
>>> Qatar RM0.68/litre
>>> Kuwait RM0.67/litre
>>> Saudi Arabia RM0.38/litre
>>> IranRM0.35/litre
>>> Nigeria RM0.32/litre
>>> Turkmenistan RM0.25/litre
>>> Venezuela RM0.16/litre
>>> MALAYSIA RM2.70/litre
RM 2.70!!!

Complainter said...

Individual perspective:
As of last month a Toyota Vios would 'cause a damage' of about
RM89,000. In the international market, a Toyota Vios is about USD 19,000 USD 19,000 = RM 62,700 (using the indicative rates of USD 1 = RM 3.30)That makes Malaysian Vios owners pay an extra RM 26,300.

This RM 26,300 should be cost of operations, profit and tax because
the transportation costs have been factored in to the USD 19,000.
RM 26,300/ RM625 petrol rebate per year translates to a Vios being used for 42.08 years.I do understand that the RM 625 is a rebate given by the government, but it also means that one has to use the Vios for42.08 years just to make back the amount paid in taxes for the usage of a foreign car. Would anyone use any kind of car for that long? Now with these numbers in front of us, does the subsidy sound like a subsidy or does it sound like a penalty? This just seems to be a heavy increment in our daily cost of living as we are not only charged with high car taxes but also with a drastic increase in fuel price.

With all the numbers listed out, I urge all Malaysians to join me
in analyzing the situation further.

Car taxation is government profit, fuel sales is Petronas' (GLC)
profit which also translates into government profit. The government may ridicule us Malaysians by saying look at the world market and fuel price world wide.Please, we are Malaysians, we fought of the British,had an international port in the early centuries (Malacca), home to a racially mixed nation and WE ARE NOT STUPID!!!

We know the international rates are above the USD 130/barrel. We understand the fact that the fuel prices are increasing worldwide and we also know that major scientist are still contradicting on why this phenomenon is happening. Some blame Bush and his plunders around the world and some blame climate change and there are others which say petroleum 'wells' are getting

Again we go back to numbers to be more straight forward. 1 barrel = 159 liters x RM2.70/liter = RM 429 or USD 134。 On 1 hand, we are
paying the full cost of 1 barrel of crude oil with RM2.70 per liter but on the other hand the crude oil only produces 46% of fuel.

Msia sells crude oil per barrel at USD130 buys back Fuel per barrel
atUSD134. And not forgetting, every barrel of fuel is produced with 2
barrels of crude oil.

If 1 barrel crude oil = produce 46% fuel (or half of crude oil), therefore 2 barrel crude oil = approximately 1 barrel fuel.

In other words, each time we sell 2 barrels of crude oil, equivalently we will buy back 1 barrel of fuel. Financially, Malaysia sell 2 barrel crude oil @ USD 130/barrel = USD 260 = RM 858 then, Malaysia will buyback fuel @ USD 134/barrel = RM 442/barrel Thus, Malaysia earn net extra USD 126 = RM 416 for each 2 barrel of crude sold/exported vs imported 1 barrel of fuel !!! (USD 260-134 = USD 126 = RM416)

So where this extra USD 126/barrel income is channeled to by Malaysian

Another analysis:
1 barrel crude oil = 159 liters. 46-47% of a barrel of crude oil = fuel that we use in our vehicles. 46% of 159 = 73.14 liters. @ RM 2.70/liter x 73.14 liter = RM197.48 of fuel per barrel of crude oil.

This is only 46% of the barrel, mind you. Using RM 3.30 = USD 1, we get that a barrel of crude oil produces USD 59.84 worth of petrol fuel (46% of 1 barrel). USD 59.84 of USD 130/barrel turns out to be 46% of abarrel as well.

Another 54% = bitumen, kerosene, and natural gases and so many more.And this makes a balance of USD 70.16 that has not been accounted for.

So this is where I got curious. Where is the subsidy if we are paying 46% of the price of a barrel of crude oil when the production of petrol/barrel of crude oil is still only 46%?

In actual fact, we still pay for this as they are charged in the forms of fuel surcharge by airlines and road taxes for the building of road (because they use the tar/ bitumen) and many more excuse charging us but let us just
leave all that out of our calculations.

As far as I know, only the politicians who live in Putrajaya and come for their Parliament meetings in KL (approximately 60+ km)are the ones to gain as they claim their fuel and toll charges from the money of the RAKYAT's TAX.

It is so disappointing to see this happen time and time again to
Malaysian public, where they are deceived by the propaganda held by the politicians and the controls they have over the press.

Which stupid idiot economist equates rebates for rich or poor with the cc of the vehicles? An average office clerk may own a second hand 1300cc proton Iswara costing $7,000 (rebate = $625) while the Datuk's children can own a fleet of 10 new cars of BMW, Audi and Volvo all less than 2000cc costing $2 millions and get a total rebate of $625 x 10 =$6,250! Wow what kind of economists we are keeping in Malaysia....wonder which phD certificate that they bought from...

Complainter said...

Misleading concept of Subsidy:
The word "subsidy" has been brandished by the BN government as if it has so generously helped the rakyat and in doing so incurred losses.This simple example will help to explain the fallacy:

Example: Ahmad is a fisherman. He sells a fish to you at $10 which is below the market value of $15. Let's assume that he caught the fish from the abundance of the sea at little or no cost. Ahmad claims that since the market value of the fish is $15 and he sold you the fish for $10, he had subsidized you $5 and therefore made a loss of $5.

Question : Did Ahmad actually make a profit of $10 or loss of $5
which he claimed is the subsidy?

Answer: Ahmad makes a profit of $10 which is the difference of the selling price ($10) minus the cost price ($0 since the fish was caught from the abundance of the sea). There is no subsidy as claimed by Ahmad.

The BN government claims that it is a subsidy because the oil is kept and treated as somebody else's property (you know who). By right, the oil belongs to all citizens of the country and the government is a trustee for the citizens. So as in the above simple example, the BN government cannot claim that it has subsidized the citizen!

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