Malaysia using Floating price mechanism for Fuel price

People are quick to react especially when it comes to cost-savings, which is a wise move, of course. Notice the almost empty gas station? This is a picture from The Star papers showing a petrol station in Petaling Jaya. Customers delayed refuelling their vehicles during the few hours before the price reduction came into effect. I refuelled on Wednesday night so I was not caught in this little shindig. Let me see, how much would I have saved....now where's my calculator? LOL!



The price of fuel reduced 15sen at midnight last night, from RM2.70 after a 78sen increase on June 4. RON97 now costs RM2.55 a litre while RON92 is now at RM2.40 a litre.

The Prime Ministrer, Datuk Seri Abdullah Ahmad Badawi, said in a statement yesterday the Cabinet decided to bring forward the “floating” price mechanism for fuel after considering the drop in global oil prices over the past few weeks as well as higher inflation in July.

The new prices were set after considering fuel prices between Aug 1 and Aug 21, and in view of the Government’s decision to set the subsidy at 30 sen a litre for RON97 and RON92, and 50 sen a litre for diesel. The PM assured the people that the petrol price would not exceed RM2.70 a litre for this year, even if the global market price went up. Did you catch the "for this year"? hmm... But then again, fuel price increase is going to be a part of our life, so brace yourself!
Abdullah (the PM) also expects the prices of goods to fall. But will they? I do not mean to be negative but as far as I can remember, there has never been an occasion where prices fall. Tell me I am wrong.

The people of Permatang Pauh are heading to vote in a by-election. Nothing extraordinary, of course, unless the opposition party candidate is former Deputy Prime Minister, Anwar Ibrahim. Malaysians probably have this event or Anwar to thank for for this petrol reduction sooner than later.

Malaysia's Oil Reserves Depleting

Malaysia's open market for vehicles has seen many foreign cars being available here. Sales are still on the rise and the periodic increase in price of gas has not been a deterrent. Below are excerpts from an insightful article on Malaysia's depleting oil reserves.

Depleting national oil reserves?

Some quotes from the Domestic Trade and Consumers Affairs Minister, Datuk Shahrir Abdul Samad:

- The figures are worrisome. Based on estimates – and cavernous appetite of Malaysians in using fuel – Shahrir reckons it will be about 10 years before the estimated 3bil barrel of oil reserve runs dry.

- “My calculations show that Malaysia has 106 barrels of reserve oil per capita. Compare this with Brunei's 2,007, Saudi Arabia's 11,000 and Kuwait's 37,000.

- Fuel subsidies make up some 50% of the country’s total subsidy bill, and with the spiralling global oil price, it alone will siphon off a sizeable portion of the government's expenditure.

- Fuel subsidies should be gradually reduced...


On a positive note,

Travellers impressed to see Lim flying economy class

Some things have not changed with Lim Guan Eng, although he is now the Penang Chief Minister.

And among that is his penchant for economy class air travel.

As the chief executive of Penang, Lim is entitled to a business class seat but he is having none of it.


Ning posing with Lim at KLIA on Wednesday in a photo taken from Jolly's blog.

Source: The Star