Fuel Price Increase, Nothing but lies!

With the recent increase in Fuel Prices in Malaysia, there has been much unrest. The Malaysian people are struggling to come to grips with the reality of the reduction in subsidies that have, for a long time, kept our fuel one of the cheapest in this region. Malaysian local newspaper The Star recently made a comparison of fuel prices between Thailand, Singapore and Indonesia. It drove me up the wall with their ignorance. Such hypocritical bull crap.

The Star wrote that in Thailand, petrol cost RM3.90/liter and we here in Malaysia still are better off. What cock! Does The Star realize that in Thailand new cars are cheaper than Malaysia by RM10,000? And that the Thais only pay ONE life-time fee for their driving license? That means NO renewal fees. There is also NO Road Taxes in Thailand. And did you know that you can drive all the way from Hadtyai to Bangkok on a six lane highway without paying any Tolls? Well you can. Not so, for Malaysia unfortunately. The Star obviously cannot print these facts because of fear that the government might revoke their license. So much for freedom of speech.

As for Singapore, how can you compare accurately when they earn in Singapore Dollars? At RM5.20/liter compared to our RM2.75/liter. This has no relevance to us as it is not the same as they are earning in Singapore Dollars. You might as well say Europeans are paying RM10/liter for their Petrol. Now at RM5.20/liter thats SGD 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? Ass.

We should compare apples to apples. Not comparing like saying, Durians in Malaysia is much cheaper than Durian's in Japan. Of course that is the case as Japan is not Durian producer. Comparing Malaysian Durian prices with Thailand would be more relevant and accurate.

For Indonesia we might say is cheaper there at RM2.07/liter but compare that to their level of income per capita. Peanuts. Let's not for get exchange rates again.

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

What the holy hell... Remember these are OIL PRODUCING COUNTRIES... WHICH WE ARE.
Something is going on here. It just wrong.

Here is another perspective:

As of last month a Toyota Vios cost about RM89,000. 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.

The government now has offered a rebate on Road Taxes. For cars under 2000cc, you get a rebate of RM625. Which by the way you can only collect after 3 months of renewing your road tax. Bolox!

Anyway, this RM625 translates to you have to use the Vios for 42.08 years just to break even the amount paid in taxes for the usage of a foreign car. Would anyone use any kind of car for that long? The answer is resounding 'hell no!'

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.

Car taxation is government profit. Fuel sales is profit for Petronas which also translates into government profit. The government may say that this price increase is due to the world market and fuel price world wide. Come on, How stupid do you think we are?

We know the international rates are above the USD 130/barrel. We understand the fact that the fuel prices are increasing worldwide and analysts continue to contradict their reasons on why this phenomenon is ocurring. Some blame Bush as he plunders around the world, some blame climate change, and there are others which say petroleum 'wells' are getting scarce. Maybe a little of all, maybe none of these reasons.

Again, lets look at the numbers. 1 barrel = 159 liters x RM2.70/liter = RM 429 or USD 134

On one 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.

Malaysia 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 barrels of crude oil @ USD 130/barrel = USD 260 = RM 858
Then, Malaysia will buy back fuel @ USD 134/barrel = RM 442/barrel.
Thus, Malaysia earns net profit of USD 126 = RM 416 for each 2 barrel of crude sold/exported vs imported 1 barrel of fuel !!!

USD260 - USD134 = USD126 i.e RM416

So where does this extra USD 126/barrel income go?
How is this fund being managed?
What specifically is the govenment spending this money on?

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 the road (because they use the tar/bitumen) and many more reasons for charging us but let's not include that in these 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 can claim their fuel and toll charges from the money of the people's TAX.

It is so disappointing to see this happen time and time again to the Malaysian public, where we are deceived by the propaganda spun by these politicians through the control they have over the media.

Which infinately brilliant superb economist or accountant in the govnernment, that came to the conclusion to equate the rebates with the engine capacity of the vehicles?

An average office clerk may own a second hand 1300cc proton Iswara costing $7,000 (rebate = $625) while the flithy rich leaders of this country with their fleet of 10 new cars of BMW, Audi and Volvo all less than 2000cc, costing millions, and get a total rebate of $625 x 10 = $6,250!

Misleading concept of Subsidy:

The word 'subsidy' has been brandished by the BN (ruling party) government as if it has so generously helped the rakyat (people) 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 subsidized 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 people. So as in the above simple example, the BN government cannot claim that it has subsidised the people!

LIES....... ITS ALL LIES.