Sunday, May 11, 2008

Is Malaysia's Fuel Price Cheaper?

The Malaysian government, on each occasion of announcing the fuel / petrol price increase would tend to compare with the neighbouring countries' prices. In doing so, they would say that our price was still the lowest in the region.

But has our Malaysian government tried to compare the fuel / petrol price with other oil producing countries? Malaysia is still a net exporter oil producing country at the moment.

A Germany-based company, GTZ International ("GTZ"), has done a survey in year 2007 on behalf of the World Bank in reviewing the fuel prices throughout the world. A common price denominator was fixed at US$0.38 per litre (Nov 2006 pricing), which was also the benchmark price for the world crude oil market. A good way to gauge when comparing different countries' way of measurement.

In GTZ's latest survey (click to download the 2 pages full survey), Malaysia has been listed at number 20. It shows that Malaysia's fuel price was the twentieth cheapest in the world. Not bad........... not true when the Malaysian government said that Malaysia's fuel price was the cheapest in the South East Asia region as Brunei's fuel price was even cheaper.

The Top Twenty list:-
1) Turkmenistan - US$0.02 per litre (ultra cheap, are you sure this is top grade oil?)
2) Venezuela - US$0.03 / litre
3) Iran - US$0.09 / litre
4) Libya US$0.13 / litre
5) Saudi Arabia - US$0.16 / litre
6) Qatar - US$0.19 / litre
7) Bahrain - US$0.21 / litre
8) Kuwait - US$0.22 / litre
9) Egypt - US$0.30 / litre
10) Yemen - US$0.30 / litre
11) Oman - US$0.31 / litre
12) Algeria - US$0.32 / litre
13) Brunei - US$0.34 / litre (Brunei is in the same region with Malaysia)
14) United Arab Emirates - US$0.37 / litre
15) Trinidad and Tobago - US$0.43 / litre
16) Azerbaijan - US$0.46 / litre
17) Ecuador - US$0.47 / litre
18) Angola - US$0.50 / litre
19) Nigeria - US$0.51 / litre
20) Malaysia - US$0.53 / litre (approx. RM1.71)

You have to know that the top twenty countries are oil producing countries and also net oil exporters. The US$0.38 per litre benchmark price was based on the crude oil price of US$60.20 per barrel. At that point of time, the Malaysian government has already mentioned that they have subsidised the fuel / petrol price heavily to the tune of tens of billions (Ringgit Malaysia currency).

As can be seen in the GTZ 2007 survey, during the crude oil price of US$60.20 or US$0.38 per litre, Malaysian fuel price was already being retailed at petrol station at the price of US$0.53 or RM1.71 (using the current currency exchange rate of US$1.00 = RM3.23).

The Malaysian government has been maintaining the fuel price at US$0.59 or RM1.92 and it would have started subsidising the fuel price if it hits above US$93.46 per barrel or US$0.59 per litre (approximately). The crude oil price hit US$94.00 per barrel on 20 Oct 2007.

Unless the Malaysian government can proof that this GTZ 2007 survey done for World Bank is wrong, otherwise please tell us what kind of oil subsidies were our Malaysian government talking about all these years?

Reading: World Crude Oil Prices - Energy Information Administration

Related posts:- Peak Oil and Confirmed! Petrol Price @ RM2.70 TONIGHT! and Malaysia's Subsidy for Petrol Price
Tags: Fuel Price, Oil Price, Petrol Price, Crude Oil Price, GTZ International, World Crude Oil Price, Energy Information Administration, World Bank, Commodity, Malaysia



Blogger Hazel said...

hi, i had add you into my blogroll, hope u do so.

11 May, 2008 11:02  
Blogger dannie chOOng said...

We Malaysian have actually paid our "extra" petrol price in advance to the govt in the form of car tax.

so what subsidise are we talking about here ? every new car purchase come with a govt tax of over 100%.

if the govt wish to compare, then let us compare our car prices with thailand, indonesia, hong kong or even japan !!! take away the ridiculous high “imported car” tax and calculate the amount used for unsubsidized petrol, and you'll still gain…

12 May, 2008 10:35  
Blogger Johnny Ong said...

hazel - linked yr blog d

dannie - unfortunately, the high taxes wld stay as long as the approved permits are still being issued to selected few

13 May, 2008 00:35  
Anonymous hana said...

i think if the malaysian govt really want to help the needy, which seems to be the reason they are using, the subsidy should only go to them. have their household income calculated and if they fall below a certain range then they get the subsidies. i believe the others can afford to pay the normal rate for fuel and what not. especially the big shots. the way i see it if the same price are not being charged to the neighbours coming in to get petrol as the locals, and the price actually match the price at their own countries, they may not come in and then tell me...who is the one at the losing end?

27 May, 2008 19:02  
Blogger thesaint said...

soon, we will not be able to afford oil. . .

27 May, 2008 23:21  
Blogger Johnny Ong said...

hana - neighbours are now forbidded to pump petrol 50km from the borders

thesaint - then economics will set in. when demand drops, supply will be in excess and therefore price will drop

28 May, 2008 20:42  
Anonymous Fuel Cost Calculated said...

We are not anymore the cheapest. We can start suffering effective June 5, 2008. Come here and calculate the new burden to our fuel cost:

08 June, 2008 13:09  
Blogger chuisan said...

=( the government is getting more and more terrible with their worming and lies.

08 June, 2008 20:32  
Blogger Johnny Ong said...

fuel cost - a place where u can calculate how much u can benefit / suffer from the fuel price increase. one thing u shld bear in mind that the rebate is only for 1 year only. don't forget that!

chuisan - govt stuffed with politicians ma

13 June, 2008 18:26  
Blogger adi said...

Dear Johnny,

I found your website while reading RPK's latest article titled "You Eliminate The Plague By Killing The Rats".

True enough, whenever there's a fuel hike, our government will always compare the prices against our neighbours which is down right stupid. I say it is stupid because comparison of one item is not a fair assessment of the overall picture. It just shows the government's lack of credibility in putting the right message to the people.

At the same time, I'm quite not happy when a person chooses to say something which is not a whole picture as well. Your comparison of petrol price and the connotation of Malaysia as a net oil exporter is one such analysis i.e. incomplete!

Now that you've researched on the petrol price, have you looked on the bigger picture of the oil and gas industry?

I'd like you to compare each of the countries that you have listed above, on the following items:
1. Population
2. Oil Reserves
3. Productions Rate
4. Reserve Life

From the above, let’s see what kind of analysis you can come out with.

They say, ignorance is bliss. I left a similar note on DSAI’s blog & he has not replied on it yet. Maybe you could.


15 June, 2008 22:05  
Blogger Johnny Ong said...

thks adi for looking up to me to provide those comparison as itemised .... hehe i'm no economist and relied on world bank's data only.

my main point in this blog post is abt the term subsidy and not so much of m'sia being a net oil exporter. for that matter, mothers alway remind their kids when u want to compare yrself, u compare with another kid who's better than u and not those who are way behind u, irrespective of their background too.

if u mine is incomplete, maybe u cld direct me to certain complete datas for me to read up first.

16 June, 2008 16:04  
Blogger Johnny Ong said...

btw, dsai with all his faithful supporters surely have more info than a small fella like me. if they can't answer u or havent responded, how good can my feedback be ..... hehehe

maybe i havent found the right article to read up

16 June, 2008 16:06  
Anonymous Anonymous said...

oh wow..Malaysia's in the top 20 for cheapest oil??? how many countries are there in the world? are u really that poor johnny that you need more subsidies? u know that the government isn't just subsidising oil right? a student attending a public college gets a subsidy of over 30 000 at a minimum...each student. Perhaps you'd like it all to be free as how Hizb Tahrir Malaysia wants it to be? guys are a joke..seriously

21 September, 2008 01:29  
Blogger Johnny Ong said...

anonymous - if u care to read the blog posting, the issue raised is more of the govt not providing the right info ........

03 November, 2008 15:50  

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