Tuesday, 16 December 2008

Crude price up, pump price down

Somebody better explain this to me quick. I see the price of crude oil rising to almost USD50 per barrel but our federal government just announced a 10 sen reduction per litre at the pump. Why? I must be missing something but what?

I'm not complaining but if I were you, I'll go out to the petrol stations and fill up my car's tank to the fullest before the government wises up and raises the petrol prices. Seems that they are trying to tell us that (1) our pump prices need not follow the natural laws of economics or (2) there's a by-election coming up soon or (3) they do not follow the world news.

I think its the third reason. Our federal garmint fellas read only the weekly digest of the world news. Or maybe it's the second reason. Our federal garmint fellas think the quickest way to win voters' hearts is to through their pockets, so they reduce the petrol prices. But then, it could be the first reason too. Our federal garmint fellas still think it is Malaysia Boleh today and forever!

So I really think somebody had better explain Malaysianomics to me real quick before I flunk my Economics 101.


Jeffrey Chew said...

SS - don't have to read too much between the lines. It is nothing to do with the sacred law of economics. It is politics and I guess certain minister wants to be elected or in the good books of the UMNOputras who will be casting their votes in March. He wants to go into history as "business friendly" Sorry - I am launching this stinging attack on your blog because I say this - oh..fuck...it's enough lah....the prices of food and other things are way high. What the hell is he doing anyway? I feel the entire BN machinery has gone haywire....cast himself in stone and forever be dammed. Oh yes - my size 8 shoe for him.

Ooi Beng Hooi said...

At crude oil price of USD50/barrel and retail petrol selling price of RM 1.90 in Malaysia, we are still subsidizing the government RM0.72/litre. (More now with the depreciation of USD last few day)

There is room for further reduction. So it is not baffling at all why the government can afford to reduce the fuel price when crude price was up.

The details and calculation can be found in the following webpage:


Even Indonesia, who is no longer an oil net exporter, has lower fuel price than Malaysia.

See below: http://ooibenghooi.blogspot.com/2008/12/indonesia-cuts-fuel-price.html