Thursday, June 5, 2008


First it was the increase in food prices, now it's petrol price, and beginning on 1 July, new electricity tariffs. A triple whammy hitting Malaysians within a month. The post-election euphoria was certainly short-lived.

Without doubt, pensioners are the hardest hit. They don't even have the benefit of a salary increase or higher COLA to help cushion the blow to their wallets.

The Star (5 June) carried a table showing that the petrol price hike to RM2.70 a litre is still the lowest compared to what folks are paying in Thailand (RM3.90), Singapore (RM5.20), Indonesia (RM2.07) and India (RM4.00). Cold comfort indeed.

And where's the logic in comparing our petrol price with that of non-oil producing countries like Singapore and Thailand? Malaysia is an oil-producing country like these countries below. Check out their petrol prices:

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
Brunei - RM1.10/litre
Nigeria - RM0.32/litre
Turkmenistan - RM0.25/litre

The government claims it had no choice but to increase the price following the rise in global crude oil prices due to fuel shortage. MAS managing director and CEO Datuk Seri Idris Jala has refuted the claim. He believes there is no global shortage. Prices are pushed up by speculators, hedge funds and oil futures traders. As a former oilman with SHELL, he probably knows what he's taking about. He feels the current price of US$135 a barrel is unrealistic. US$40 is more reflective of the fair value of oil.

The irony is Petronas reported a net profit of RM1,092,949,000 for the full year ended March 31, 2008. As a state-owned enterprise, Petronas' earnings help boost government coffers. For the year ended 31 March 2007, Petronas paid RM48.3 billion in taxes, royalties, dividends and export duty.

Malaysians have a right to expect some of the huge profits from oil to be channelled towards lessening the impact of rising prices in the country. The government is certainly not gaining points for the way it's handling the situation.

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