Sunday, July 13, 2008

Facts after doing some homework

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

Malaysian PerCapita Income USD 5000
Singaporean PerCapita Income USD 25000 - FIVE TIMES our per capita. They have more oil and gas than we have?

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

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
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

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.

Malaysia 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

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!


Johnny Ong said...

the current govt will put in distorted info into the newspapers or tv news as not many people uses the internet to read the real news.

GingGoy said...

why not compare it with my country to have another insight? we also renew driving licenses but every three years. we pay toll on expressways out of manila. gasoline here is now P60/liter (about US$1.33 per liter)

qmos said...


Henry Lee said...

wow.... quite a complete facts u got there. U didn't get to compare the price in Brunei yet. Same currency exchange with Singapore but the petrol? BR$0.30/litre!!! It's only cost about RM0.72/litre! Car price? Sportcars & SUV along the road! You can even get a second hand car better than kancil for BR$500 there....