THE REAL TRUTH ABOUT PETROL PRICES AT THE PUMP

A kind soul sent me the following analysis which explains why the mainstream media never tells us the truth.

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

Malaysian PerCapita Income USD 5000
VS
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 years.

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.

Financially,
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 Govt?????????

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:

Example:
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?

Answer:
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!

Hefty increase in price of petrol by 78 sen per litre

We are all aware of the hefty increase in the price of petrol since Black Wednesday but it's time to fight for an overhaul of the tranportation system and the the costs of owning a car in Malaysia.

For example, did you know that in Singapore, once you get your driving license, there is no yearly renewal fee? It's free for life!! Just like some of the credit cards being promoted out there.

We need to fix these issues:-

1. LRT, KTM Komuter, KL Monorail and RapidKL services. They are all there but no one is able to make it worth together like an orchestra. I heard the Mat Salleh who wanted to fix it was given the boot for his ideas. What a joke!!

Today, less than 30 trains service over 100,000 passengers daily compared with 300,000 on 62 trains when KTM Komuter was in full swing. The double tracking project from Rawang to Ipoh is already completed but the service can't start because the company that supplies the trains has gone bust!!

2. Toll roads

Most of the toll operators are making a huge profit after repaying their development costs and either the companies should be taken over or consolidated with the money-losing train systems that the government was forced to take over. How can the government allow toll operators to charge so much due to short-sighted agreements and yet use taxpayers money to bail out transit rail systems operators? It makes no sense at all. Plus Expressways Bhd declared a Profit before Tax of RM1.308 billion for FY 2007. On the other hand, Star LRT and Putra LRT were taken over by Syarikat Prasana Negara Bhd (SPNB) at a whopping costs of RM3.3 billion and RM4.5 billion respectively. In other words, Malaysian taxpayers have to bear the costs of privatisation failures and pay more toll to toll operators who rip us off and demand compensation from the Government so as not to increase tolls further. We are really idiots!!

3. Exorbitant import and excise duties and road taxes on cars

Why do we have to pay huge amount of import duties and taxes on our cars just in order that Proton is able to keep making cars. Aren't we putting our heads in the sand? An average popular car like Toyota Vios cost US$10,000 (RM33,000) in America. In Malaysia, it costs more than RM80,000. How can this be? Only because, we are supposed to drive around in Proton cars or else!

If Proton can't compete after 22 years of subsidy from the rakyat, it should sold off or shut down. The duties and taxes should be abolished or streamlined in order not to burden the rakyat. 

4. Abolish AP system

The AP system should be abolished and no more APs should be given out. Over the many years, AP has been given, individuals has pocketed billions of ringgit for doing nothing. Except for a handful of companies who re-invested their profits to build a thriving business of selling and servicing cars, the AP system seems only a way to print money without increasing our competitiveness in the business of selling and servicing cars. Even then, some of these companies continue to abuse the system by buying new cars overseas, declaring them as used cars to obtain lower import duties and then selling the cars locally and making obscene profits.

5. Export our old cars

Did you know that Singapore exports more cars than Proton? Singapore exports over 100,000 cars a year. Due to its mandatory car scrapping law where cars more than 10 years old are automatically assigned to the scrapyard and its incentives to dispose of cars used for more than 5 years, Singapore car owners are able to purchase a new car and used cars are thus exported out of the country. It helps that the COE system keeps the car price competitive unlike in Malaysia where we can't export our cars since most of the value is in duties and exorbitamt taxes. 

6. Encourage diesel cars by selling higher quality diesel and giving incentives for using diesel engines

It's a fact that over 60% of cars in Europe run on diesel today and modern diesel engines are far more efficient and less polluting than petrol engines. Yet, due to the fact that Proton does not produce cars with diesel engines, we are discouraged from owning one. And yet the government is giving incentives to build biodiesel plants. No wonder, all the projects failed. The right hand does not know what the left hand is doing. A turbo charged modern Euro 4 gives a higher power output and yet consumes half that of a petrol engine but most of these engines start to give problems after a while because of the high sulphur content of our local diesel 

 It time to give the rakyat a break or we will call in the ghostbusters - PR.