Wednesday, November 19, 2008

Oil price

Malaysian are currently paying RM2 per liter petrol despite the global oil price has reduced to USD55 per barrel. Have you ever calculated that the price we are paying is the actual petrol price that people in other countries are paying too? Plus, our government has promised to give subsidy of RM0.30 for every liter of the oil.. But the government has just announced that there is no more subsidy given as the oil price is significantly going down.

Found a simple, but practical analysis on the actual oil price here. It's worth reading it, no harm!

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Ganesh: Malaysians are paying too much for petrol. Even after the recent reduction, we are actually paying RM1 more per litre than what we are supposed to and this money goes into the government's pocket.

One barrel of crude oil can produce of 159 litres of petrol. The price of US$55 per barrel should be multiplied with 3.5 being the exchange rate of the US dollar to Ringgit Malaysia.

The total should then be divided with 159 litres. Thus, US$56 x 3.5 = RM196 divided 159 litres = RM1.23 per litre.

The government has informed us that we are receiving a subsidy of 30 sen per litre. So, RM1.23 per litre - 30 sen = 93 sen per litre. But Malaysians are paying RM2 per litre! (the new price after the Nov 17 reduction)

By right, Malaysians should be paying 93 sen per litre and not RM2 per litre. The reduction given by the government does not make any sense at all and does not correspond to the reduction in price of crude oil per barrel.


4 comments:

Anonymous said...

I thought a barrel is 117 litres? Even at 117, we are still overpaying for petrol.

ibnul'araby said...

Dato'.. I think this guy left out something. The price he is talking about is just a crude oil price. He should also consider the processing cost of this crude oil. That cost I guess differ from one gas company to another company due to differences in additives added to this oil.

To be honest, I am also not very sure about this processing cost per barrel. Seems like gas company and government are still hiding something from us.

mr fotografer said...

Yeah, that's true. The USD55, and lower now, is the price of a barrel of crude oil. Somehow, the processing cost should be considered, which we don't really know how much. But I guess the cost is not that high, rite?

Instead of putting the ceiling price, they're now planning to fix the minimum price of the oil. Haha, afraid if the oil price keeps going down!

Anonymous said...

Whatever the crude oil price (and related costs) is, it is apparently unreasonable / illogical to put a floor price, without any ceiling. If it is like that, Government (gov) can manage their risk well, but not the Rakyat. Even if price stability is the concern, gov can put the floor, but put also the ceiling. So that both parties' risk managed. Nowadays, it seems like gov & Rakyat cant tolerate with each other. Rakyat sudah berkira dgn gov. Supposedly, Rakyat tak kisah gov dapat duit Rakyat, because it is the Rakyat's gov. The duit will be used for Rakyat country's development. If it is true, then okla. But Rakyat sekarang strongly feel like when gov ada duit lebih, duit tu dibazirkan, atau dimakan oleh sesetengah individu dalam gov. Itu pasal la...