Malaysian Per Capita Income USD 5000 VS Singaporean Per Capita Income USD 25000
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? No renewal fee after that? Also that goes for road tax as well? And do TheStar 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
Iran – RM0.35/litre
Nigeria – RM0.32/litre
Turkmenistan – RM0.25/litre
Venezuela – RM0.16/litre
MALAYSIA – RM2.70/litre
RM 2.70!!! Individual perspective:
As of last month a Toyota Vios would ’cause a damage’ of about RM 89,000. 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 for 42.08 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 a 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 scarce.
Again we go back to numbers to be more straight fwd
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 at USD134. And not forgetting, every barrel of fuel is produced with 2 barrels of crude oil.
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 buy back 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 Govt?
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 1barrel). USD 59.84 of USD 130/barrel turns out to be 46% of a barrel 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 Kuala Lumpur (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 the 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…
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 subsidised 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 subsidised the citizen!
Popularity: 89% [?]
June 11th, 2008 at 12:20 am
I really support 100% what u did mentioned above. We are not stupid like `them` which think we are stupid. We all realize that comparison and why `they` still want to compare with unrelated country? Are they stupid in economy or just pretend to cover their mistake??!?
June 11th, 2008 at 1:52 am
It really disappointing seeing what today’s Malaysia Government led by Pak Lah has done to the country. Previously we have strived very hard to make sure we are among the frontline of the developing country, but with this kind of stupidity and poor decision, they just turn Malaysia into poorer country, but themselves become richer an richer.
I wish this article could be published in every newspaper and I pray for the happiness for those reporter / newspaper editor who publish this article for the sake of Malaysia~!!
June 11th, 2008 at 8:36 am
correction, rm625 is one time deal only. not yearly
June 11th, 2008 at 11:00 am
For what has stated in the news or rumours, indeed, it happened. What should we do for our future? Hoping miracle happens? Start thinks for our roadmap future benefits that to live within our country peacefully? What should and what should not be?
June 11th, 2008 at 5:40 pm
telah Rasullullah bersabda di antara petanda kiamat itu,,yg kaya semakin kaya dan yg miskin semakin miskin……..
marilah sama2 kita sama2 muhasabah diri….
June 11th, 2008 at 5:54 pm
before make any statement, pls check this website http://www.opec.org/home/PowerPoint/Reserves/OPEC%20share.htm
where are malaysia reserve oil? we are out of oil!!!… that why if we not increase fuel price… after 2012 the price (RM2.701) will be double.
June 13th, 2008 at 2:36 am
To farrel - Although I am not well verse in the economics of oil…I would thrive to seek out the overall picture as possible as I can…before telling people about one so to say fact, get all your fact straight first man!!! What the heck giving us a link on opec whereas malaysia is not a member of it???? http://tonto.eia.doe.gov/dnav/pet/pet_pri_wco_k_w.htm …It shows actually the openness and literacy of some of malaysian people mind (pendek kata jangan totok dan lurus bendul…buka sikit minda tu)
June 26th, 2008 at 10:03 pm
Dear friend
lets not get carried away with this and be rational.. of course we are disappointed by this current situation… me my self is effected very much personally, however we are not the only smart guy around… i am sure the policy maker is also smart and i don’t think they did not see the implication of their action…
But they know inside out of the government’s operation. There’s a lot of executive decision required and and i am sure they know best on every decision they’ve made for the sake of the people the country and the next generation.
I give one example on why i say like that.
Take the fisherman example. Seeing on the surface yes the example above is correct. Nothing wrong with it… however what i am trying to say here is to bring us see beyond that, so that we are not too emotional and may be we could understand why the gov has to make such decision despite the risk of becoming unpopular politically.
Lets see it at different perspective (say the policy maker perspective). The fisherman has to use patrol for his boat engine, his boat also need to be maintained and repaired after certain time. His fishing equipment also have a price and do need maintenance, so if he caught a fish and cook it for his son for free, he could not get an extra money to cover his overhead… remember he also have house to look after which has a utility bills and etc.
Therefore say the market rate of the fish is RM15, if the fisherman charge his son RM10 for the fish, his son is still benefited a discount of RM5 (subsidy). Since his son also working and has a steady income it is about right for him to give the RM10 to his father for the food and to maintain the household.
I am not saying that we are wrong and the government is right. What i am trying to say is there is always a three dimension and we should not judge and make conclusion just by seeing at one angle…
Since decision like this would make the Gov look very-very bad, i am sure they have look at many angle before making such decision…
…just a different perspective
TOk Uban
July 25th, 2008 at 11:19 pm
After reading the article above, it is very likely that our petrol price is so unreasonable high for a variety of reasons namely (the main ones):-
1) The ‘lost’ and illegal Government is demoralised by the loss of 5 states and Kuala Lumpur FT on 8th March and use this to punish the poor voters and divert the subsidies so recovered into the sectors favourable to BN.
2) The Government is using this opportunity to lay blame on the global development of prices hike to obtain the money from the people to patch up all the big holes left by the mismanagement, corruption, lopsided deals and abuses of power in cronyism and nepotism.
3) The system is so rotten and lost all direction and this sudden massive price hike across the board of all goods and services would precipitate the failed nation into greater paralysis giving rise great tribulation to all the people.
Immediate resolution:-
1. To recover the resources and lost wealth in fossil oil via a Royal Commission of Inquiry on the Petroleum Development Act 1974 Act 144 as much of our resources are signed away permanently to outsiders.
2. To investigate in the context of subsidies why the Government has been misleading the people by comparing apple with grapes in the price of fuel in the region to justify increases up to the level in Singapore of RM5 or simply S$2.20. Also it is important to compare oil producing nations which are selling fuel at a fraction of what we do in Malaysia.
WARNING:-
Unless, the people demonstrate their outrage by sending a million copies of this message to the illegal Government, we are going to suffer much more and die standing when “Pickins sees US$300 per barrel unless US cuts import need in 10 years”. Would we have to pay RM10-15 per litre then?
We have this paralysis of two and more sets of accounts even for the petroleum industries in Malaysia.
We need to unearth this national scandal in the latest fuel and food prices upheaval.
Are we a net exporter of fossil fuel?
If we are a net exporter of fossil fuel, then the impact of the prices increases of the crude oil would also benefit Malaysia hence why the need of the excessive fuel subsidy?
Petronas acting Chairman and CEO / President was telling us Petronas does not benefit fully from the price increases of the crude oil in the market place although we are net exporter. This gives the impression that we are net exporter on paper only while the extraordinary surpluses in sales revenue due to the high oil price go into other people pockets including Petronas and associated gangs.
Actually the subsidies the BN’s Government is talking and misleading the people is the subsidies incurred by the Government in buying the fuel products in the market place and selling it through the various distribution net works of petrol stations at controlled prices. This subsidy is not related to Malaysia as a petroleum exporter.
Do we know how is the trading system of petrol and diesel being managed when there are a few players in the market place?
As the Government controls the price of fuel in Malaysia by fixing a certain price below the market price, the Government has to subsidise the petrol companies for the difference.
So who has the final say on the prices at the pump? Is the final price at the pumps determined by the market price of the crude oil or the final price of the refined fuel?
What we hear daily is the market price of the crude oil, but how do we determine the market price of the refined oil? Is that price fixed by the oil cartel?
Also why should the Government pay for the commission to the petrol sales at the pump stations?
How do the operations at the border areas at Singapore and Thailand account for their sales to foreigners when the cheating can take place with the stations selling to foreigners at market price but likely declared as local sales hence get the full selling price and also the subsidy? This can happen when there is no separate storage tanks for different sales. This amount can go up to millions of Ringgit.
Joshua Kong
July 25th, 2008 at 11:23 pm
Pickens Sees $300 Oil — Unless U.S. Cuts Import Need
July 22, 2008
Timothy Gardner–Reuters
WASHINGTON July 22 (Reuters) — Oil prices will hit $300 a barrel in 10 years if the United States fails to reduce its dependence on foreign imports, billionaire oil investor T. Boone Pickens said on Tuesday.
The United States imports nearly 70 percent of its oil now and Pickens said the world’s top energy consuming nation would import 80 percent in a decade if it does not aggressively tap its own natural gas and renewable resources.
“If we continue to drift, oil will hit $300 a barrel in 10 years,” Pickens said during testimony at a Senate hearing.