Monday, June 16, 2008

Malaysia Oil Subsidy Removal (Citizens Are Conned!)

WHAT IS NEVER MENTIONED IN Mainstream Media like NST/TheStar/Utusan/BH are these

Malaysian PerCapita Income USD 5000
Singaporean PerCapita 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

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.

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

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:

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?

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!

Dog Without two legs (Inspiring!!!)

And yet we think we are the ones going through difficult times……

Don't walk in front of me, I may not follow.
Don't walk behind me, I may not lead.
Just walk beside me and be my friend.

"People Will Forget What U Said
People Will Forget What U Did
But People Will Never Forget How U Made Them Feel"