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Thursday, June 5, 2008

Oil Price Looms Sky High

Today marks the first day of the new increase in oil prices. Oil prices rose to a 41% increase compared to the previous, subsidized price of RM1.92/L. Diesel prices increased by as high as 1 ringgit. The government is still subsidizing 30 sen a liter for oil.

The last time I filled my car in the US, the price of gas there was $3.60/gal. That price if converted to RM would be roughly RM3.04/L. Which means Malaysians are paying just a little bit less than what Americans are paying for. Good for that.

Last night saw massive jams on roads leading to gas stations. Consumers decided to fill up their tanks before the new price was implemented.


Read full story here.

With that increase, a person spending 100 ringgit would end up spending at least 141 ringgit on gas alone. That's not including the extra money he has to spend on daily goods that would also increase due to this oil increase. Imagine how much would that be...

So what do we do with this oil surge? Well the government has outlined some massive policies. Among them is the announcement that they would give Rm625 as rebates to people with cars of up to 2000cc and jeeps/pick ups to 2500cc a year every time they renew their road tax. Read that hear.

At first glance, this may seem a very good deal. But think again. Pak Abu, a fisherman in the rural parts of Terengganu, would receive that 625 ringgit for his old and rusty Kancil. Mean while, Tan Seri Dato' Ahmad, a highly successful business man in KL, who ones 20 cars, would receive Rm625 for each of his cars. 625 ringgit for that Tan Seri is nothing compared to 625 ringgit for Pak Abu. I say a different approach has to be done on this policy.

What else can we do? Well, I say it's about time we explore alternatives to fuels. Why not go for hybrid cars some might say? I agree as well with that. It cuts the consumption of oil and uses reusable energy sources like rechargeable batteries and so on. Plus, with less fuel consumption, the cars will be also less of a pollutant. That's a major plus. But if the government does proceed with an influx of these cars, Proton would obviously go bankrupt. And that's a major no no for the government. They've spent endless amount of money for the continuous survival of this 'anak kesayangan', they are not prepared to let Proton go down the drain. Proton can't compete with hybrid cars. Heck, they can hardly even compete with the cars already here in Malaysia, even with all the government policies on foreign cars that benefit them.

What I heard from my colleagues here in SIRIM is that Petronas is actually building this very huge storage tank in Melaka that would store low grade oil from Africa. The diameter would be 75 m (not sure with the height). This low grade oil is obtained from the very bottom of the oil wells, and are even said to contain sand! This low grade oil would then be processed and mixed with regular grade oil to be sold. Just imagine.

Well, with the global rise of oil price, a lot has to be done by the government to help sustain the need of it's people, especially those low income people. Any new measurements taken has to be done with extra consideration for these people. Everything has to be done wisely and carefully. Else, the poor gets poorer, and the rich gets richer. We don't want that. No, not here in Malaysia.

10 comments:

Ashwaq said...

a really nice entry and your point about the rebate thing really make sense...cam really unfair...the more cars you have the more money you get...lagi2 untuk orang kaye...so unfair...

Hubab Al Munzir Asmawi said...

yup, so unfair..

and plus, orang kaya yg mmg kaya nak mati, orang bagi kat die 645 ringgit die tak rase pape2 pon.. sbb bagi die tuh sikit je.. huhu..

Anonymous said...

How many tans sri do you think we have????And how many rich ppl do think owns more than a car or two???Anyway, payout to them do not solve the economy crisis. They represent minute percentage. Besides do you think a 'rich' person owns a 2000cc below cars???

Another thing about the lower grade oil. What are you talking about? These oil will go through process like desanders to get rid of the oil of sand before processing into good quality oil. Oil is generally 'dirty' when it comes out of the well.

You represent the attitude of many malaysian. Always lsiten to rumors, jumping to conclusions and blatantly accuse other ppl of wrongdoings.

Anonymous said...

and to believe you are taking chemical engineering for your major..how embarassing.....look into your coulson and richardson text book for oil processing chapter...

Hubab Al Munzir Asmawi said...

I don't know from what planet you're from but surely, many rich malaysians own more than a car or two.

Some people, have a joy in collecting cars. They have cars from various ranges. So surely, there would be does below 2000cc. I'm not saying that all of them are below that.

And these low income people, how do you think they would survive with such an increase? Minyak naik, sume bende akan naek skali.

What I'm trying to say is that many policies have to be made with extra consideration of these people low income people. we don't want them to terus dibelenggu kemiskinan. Please be considerate.

And what I was passing out about that low grade oil purchase is not fabrication. You don't even have proof to accuse me of passing out rumors, and there you go.

Mind you, the people that told me this were SIRIM engineers who were checking the plan for that tank as part of their work.

And about that oil also, pada hakikatnye it's still low grade oil after all.

and if you think you're so 'know-it-all', why don't you tell me who u are? cakap berapi..

Ashwaq said...

hmm...knape encik anonymous nih garang dan emosi sangat....even if you disagree with the blogger's opinion on the harga minyak, don't be too harsh..just state your opinion kindly thank you!

emm...i don't really understand why you're really pissed about how many cars do these tan sris have...awak terase kee..awak orang kayee ekkk?
back to the point, for example my neighbors, who are not dato's or even tan sris own more than 1 car..there is this one family that have at least 5 cars..and most of them are kerete biase (under 2000cc)..soo...and it will be unfair for them to get these money sebab derang ni dah cukup berada dan kaya (alhamdulillah for them) to be compared to people yang can barely own a car yang hanye boleh dapat RM645...tak rase unfair ke tuuu?

about the lower grade oil..can;t say much about that cause tak tau banyak....

and well...about what you say about attitude of many malaysian...hummm...like I said before...jangan lah harsh sangat nak bash orang..he was just stating his opinion..takleh keee? there is a fine line between jumping to conclusions and predicting the outcome to some situation..tak kee?

jangan emo yeee! peace out~

Anonymous said...

"Besides do you think a 'rich' person owns a 2000cc below cars???"

bukan mau berat sebelah.. tp ive seen a BN exco suddenly changed his MPV to 2000cc below cars...an expensive one of course mcm mini cooper, swift..

something to ponder..hurm.

-miss anon- sorry.

Anonymous said...

Tell me again how many percentage of people collect cars????You don't get the point. Fair or not is not the issue. You can own several cars but you still entitled to the rebate. Most malaysians who have more than two cars are still in the middle class category. They are not rich and they toiled to earn living like any other people. Why do they have several cars, especially those below 2000cc?Chief reason is simply due to logistic!They are going separate directions and it is more convinient, knowing how saturated and annoying our public transportation can be - some places doesn't even have public transportation facilites, even then, some services are not frequent enough. So why segregate these people? Beside, most of them taking loan for the cars, pay insurance, road tax, pay toll etc. I'm sure none of you guys are doing that!!
I don't disagree with your opinion on the lower income group but don't blindly assume the assumptions on other people.

Our oil like the tapis blend is sweet which mean that they selling prices are more that the ones that we imported from middle east which is sour, dirty as u called it. It is simple economic. We sell the higher grade ones and domestically we process the lower grade ones we imported at less price. But at the end of the day, it is the same oil after being refined into final products and to include different addictives propritery to different companies like Exxon etc. So, what's the problem? It doesn't mean your car going kaput when we use these oil. Pernah dengar ada org bermasaalah guna minyak ni. Your SIRIM friends may got his fact right some of it but he does not have the whole picture and scenario.Btw, I assume you know what sweet and sour means in chemical engineering term, correct?

If you are studying chemical engineering, it is good to know that these days when oil prices are high and climbing and probably stay for a while, chemical engineers working in oil and gas industry easily can earn more than RM10K per month with at least 5 years of experience (it is even underated in Msia and excluding Petronas being a semi gov entity), so if you are one of the lucky ones in the future, org kaya yg kaya mmg nak mati should aptly applied to you also.

Hubab Al Munzir Asmawi said...

anonymous, i dont have any grudge against the rich, if that's what you think. haha.. Dah rezeki derang macam tuh, takpe la..

the grudge i'm having is with the government. As i mentioned, the government can't treat the rich and the poor alike. else, the rich becomes richer, whilst the poor becomes poorer.

And for your information, regarding the oil, I'm not talking about the oil we currently purchase from middle east. the oil purchased from that region is still ok. I'm talking about purchasing oil from Africa. They've never done this before, hence that's why they're buling a new storage tank in Melaka. Oil purchase from that region is said to be from the very bottom of oil wells with high percentage of impurity. Thus, whenever they do refine it, 1) it would need more energy and money, 2) the purity of the refined oil is questionable.

Next time, please read my post carefully and understand the content before you post comments that are just annoying. And please, don't refer to me as 'orang kaya'. Heck, i'm still a student and what lays out there for me is still very uncertain.

Anonymous said...

Still. oil from africa namely from sudan where we imported contains higher BS&W (base, sediment and water) and other impurities which will be eventually be rid of. The tank and other equipment have to be build with the right specification to withstand this possibly corrosive nature of this fluid. This oil can be blend with other oil to make it less 'impure'. Our plant in malaysia is designed for that. If anything need to be revamp on the plant, be it so.That's why we have a profession called engineering, if you have forgotten. It is not something impossible. What do mean from the bottom of the well???The reservoir is vast. Ni bukan cari air!Petronas has invested billion in projects in these countries to get these oils which otherwise will grabbed by China who are our partner in most african countries. There are no such thing as purity of the refined oil being questionable.That's a laugh.

If you are talking about all the prices going up burdening the 'rakyat', tell me which country has not been affected by the oil price increase. We need a stronger policy to sustain our economy and those policy often not popular.

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