Digest on Malaysian News

Is it time for us the motorists of Malaysia to brace for yet another round of fuel price hikes right after RON97 went up 15 sen at the beginning of this month?

The Malaysian Insider reports that key players including Dometic Trade, Cooperative and Consumerism Minister Datuk Seri Ismail Sabri Yaakob and Pemandu CEO Datuk Seri Idris Jala will meet today to discuss another round of fuel hikes at 3 PM today, this time across the board, affecting other fuels such as LPG, and RON95 petrol.

Word is that another fuel hike could be announced as early as this evening. RON95 is currently sold at RM1.85 per liter while the recently hiked RON97 goes for RM2.30 per liter. Diesel is sold at RM1.75 per liter to the public.

The cabbies have grumbled that the petrol subsidy card does not give them price advantage. Now, the fishermen are complaining on the same issue but with a threat to strike.

If the subsidy card is suppose to give the fishermen a lower diesel price compared to the market price, then the government is slow in adjusting the subsidized price.

But of all noble intention, subsidy card is not the answer because no matter what the price is, the receivers will always complained.

From TheStar

Strike threat if diesel prices not lowered

PANTAI REMIS: Some 45,000 fishermen from Perak, Selangor and Sarawak are set to go on a three-day strike this Friday over the high price of diesel.

Pantai Remis assemblyman Nga Kor Ming said the fishermen were frustrated that the price of subsidised diesel was still RM1.43 per litre when the crude oil price had plunged from US$145 per barrel to US$42.

Nga, who is also executive councillor, urged the Federal Government not to ignore the pleas of the fishing community who had “many times” asked that the price be lowered from RM1.43 to RM1 per litre.

“I hope the Federal Government will take swift action to prevent the strike, either by meeting their representatives or lowering the diesel price.

“If not handled properly, the strike would involve fishermen nationwide. The supply of seafood could drop by as much as half,” he said yesterday.

Already, hundreds of fishermen in Kedah had gone on strike yesterday, said Nga.

Boat owner Kuik Teng Lee, who spoke for some 1,000 fishermen here, claimed that the community was struggling to make ends meet with the cost of diesel making up 70% of their expenses.

“It takes RM7,000 to RM8,000 a month to maintain one vessel but if the price of diesel were to fall to RM1 per litre, our expenses would drop to RM4,000,” he said.

Pantai Remis Fishmongers Association chairman Lim Cheong Eng also urged the Federal Government to lower the price of subsidised diesel by tomorrow.


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Is the petrol card given to taxi drivers necessary? When the oil price shoot up, the petrol card given to cabbies are loaded with subsidized price. Thus, they are enjoying cheaper fuel price.

Now that the oil price has dipped, the cabbies are complaining that the subsidized price remain the same and they are paying above the market price. If so, they can just buy petrol without using the petrol subsidy card.

Furthermore, even with the petrol subsidy card, taxi fare remain high and does not benefit commuters.

From TheStar

Cabbies stuck with ‘useless’ petrol card

By HAH FOONG LIAN

IPOH: While motorists are paying less for fuel these days, taxi drivers are forking out more with the petrol subsidy card.

Ipoh City Taxi Operator Association chairman Yap Siew Chuan said the subsidy card, which they received from the Government, charged RM1.92 for a litre of petrol.

Yap said the Government had issued taxi drivers with the card after the petrol price shot up to RM2.70 a litre in June.

“But now the retail price of petrol is RM1.90 a litre,” he told reporters here yesterday after raising the matter with Gopeng MP Dr Lee Boon Chye.

Yap said this meant that taxi drivers were paying two sen more for a litre of petrol if they were to use the card, which they received in October.

“We hope the Government will revise the petrol subsidy card to less than RM1.50 a litre,” he said, adding that the card was now useless to them.

Prices had been cut for the fifth time this year and RON97 petrol is now RM1.90 per litre, while RON92 petrol and diesel are priced at RM1.80 a litre.

Yap said the taxi drivers were unable to lower their fares although the petrol price had dropped to RM1.90 per litre because the prices of other items were still high.

“We are being burdened with the high cost of tyres, spare parts and maintenance fees,” he added.

Yap also urged the Government to look into the problem of high insurance premiums imposed on taxi drivers.

In June, he said, taxi drivers experienced an increase in annual premium from about RM300 to RM800 for those with No Claim Bonus (NCB). “Without the NCB, the premium could even go up to RM1,000,” he added.

Dr Lee said he would write to Bank Negara and the Finance Ministry so that the respective authorities could help resolve the problems faced by taxi drivers.

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Petrol and diesel retail prices will be reduced by 15sen per litre effective Tuesday, Deputy Prime Minister Datuk Seri Najib Tun Razak announced.

The new retail price for RON97 is RM2 per litre from RM2.15; RON92 at RM1.90 from RM2.05 and diesel at RM1.90 from RM2.05.

Fuel prices were last reduced on Nov 1.

The latest prices reduction for fuel may make motorists happy, but consumers still pay old prices for goods and services (which most have not be reduced since a few months ago) and farmers still pay dearer for fertilizers and other basic stuffs.

Related posts:
* Petrol price lowered but no change in other goods
* Oil price down, everything else still up

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Due to the waning price of global fuel price, the government indicated that the local fuel price might be reduced as well.

However, 99.9% of Malaysian agreed that price of essential items did not reflect the decline in oil price. Najib said the prices of certain goods and products would be reduced in a day or two.

Related posts:
* Oil price down, everything else still up

From The Star

Najib: Local fuel price to be lowered

PEKAN: The Cabinet has give the go-ahead to reduce the pump price of fuel soon in view of the continuing decline in global oil prices, Deputy Prime Minister Datuk Seri Najib Tun Razak said.

”We promised that if the global oil price goes down, the domestic fuel price will reflect the actual price market.

”So, just give the Government some time to make the decision. The Cabinet has already given the mandate to the economy council exco chaired by the Prime Minister to make the decision,” he told reporters at his residence on Saturday after presenting gifts to 180 recipients who would be performing the haj in Mecca.

Najib, who is also Finance Minister and Pekan MP, was asked to comment about the oil price which had continued to fall and registered about US$62 per barrel on Friday.

On when the new price would be announced, Najib said the people would not have to wait that long.

”It can be within a week, depending on when the meeting will be held,” he added.

To another question related to the price of essential items which did not reflect the decline in oil price, Najib said the prices of certain goods and products would be reduced in a day or two.

He added that several hypermarket owners had agreed to work together with the Government on this matter.

On whether the global recession would hit Malaysia, Najib replied: ”Can you wait for Nov 4? I will come up with a complete response.”

On Nov 4, Najib is expected to list measures to buffer the country from the impact of the current global financial crisis during his winding up speech in Parliament.

When asked about the global crude palm oil slipping to RM1,500 per tonne recently, Najib said the income of Felda land scheme settlers would definitely be lower.

However, they had earlier enjoyed very high incomes, generating between RM3,000 and RM4,000 monthly, he said, adding, he hoped that they had set aside some of the cash as savings.

He also said the RM144.44mil productivity incentive bonus that they would get in December would help to weather the hard times and that they would receive between RM700 and RM2,000 each. ”We have also given the assurance that their income will not be lower than RM1,000.

”We will also encourage them to venture into non-farming activities such as business, handicrafts and growing vegetables so that they will not be financially only dependent on palm oil or rubber trees,” he said.

As for smallholders, Najib said the Government would have to look into ways to help stabilise the price.

This matter was expected to be discussed by the Cabinet Committee on palm oil soon and might eventually involve other countries, he added.

Meanwhile, in Johor Baru Domestic Trade and Consumer Affairs minister Datuk Shahrir Abdul Samad said the expected reduction of petrol prices at the end of the month would not be more than 15sen.

"We do not want a big reduction in petrol prices resulting in huge losses suffered by petrol station operators nationwide. "That is why we are reducing it gradually but sooner or later we will reach a reasonable price for the consumers," he told pressmen after launching the Financial Awareness Week or dubbed the M2K fair on Saturday.

He explained that it was the government's intention to reduce petrol prices as soon as possible but such a move must be done gradually and accordingly so that everybody reaped the benefits.

"We must take into account the consequences of a huge reduction that could have a negative impact on the operators. "The present method in reducing the petrol prices gradually will not disrupt the country's oil industry," he said.

He also said there was no reason for transport cost for bus or lorry companies to increase as diesel was sold to the companies at a subsidised price of RM1.43.

In fact, 70% of diesel sale was sold at the subsidised price.

Express, school and intercity buses as well as lorry companies were presently reaping benefits of the subsidised price, he said.

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Malaysian consumers are in dire straits. The recent fuel price cut have little or no impact at all. The oil price is down by a few sen, but everything else is more or less still the same price.

In fact, come November, price of some items probably will be increase.

Abdullah Badawi meanwhile complained that the consumer groups must do their part to force the prize of consumer goods down and not to entirely leave it to the government. Abdullah have forgotten that it is the government who jacked up the oil prize drastically a few months back that caused the prizes of all other thing to spiral up.

From TheStar

Fuel price cut will have ‘little impact’
By LISA GOH and BAVANI M.

PETALING JAYA: It will provide some relief but will not have much impact — that sums up the sentiments of the public on the fuel price reduction yesterday.

City folk were definitely happy but many doubt that prices of basic necessities would go down in tandem with the reduction.

Bus and lorry operators said it did not really benefit them as prices of other goods had gone up.

Pan Malaysian Bus Operators Association president Datuk Ashfar Ali said the reduction in fuel prices would not affect bus operators.

“For us, it’s still the same. We are still paying the subsidised rate of RM1.43 per litre for diesel,” he said.

He added that bus operators had also not felt the benefit of lower fuel prices as the cost of other products were still high.

“When the fuel prices shot up early this year, the price of everything else — batteries, lubricating oil and tyres — went up. Now, even though fuel prices are down, the price of these items are not coming down,” he said.

Pan Malaysian Lorry Owners Association president Er Sui See said that while he was happy with the reduced diesel prices, lorry owners still would not be able to absorb the escalating transport charges.

“Only a quarter of the diesel we use is subsidised, so yes it’s good that diesel prices are down.

“But all the other costs that have gone up are still going up. We can’t absorb the cost,” he said.

He gave the example of tyres, which would cost 15% more from Nov 1.

Tutor Tan Chin Swee, 48, said: “The sudden jump in petrol price a few months ago resulted in a spiral effect which pushed up the price of many daily necessities. I doubt that the reduction can undo the inflationary impact that an ordinary person is now facing.”

“Recession and inflation are inherent in any economy and are things that we have to live with,’’ Tan added.

Manager Gobal Rajee, 46, said he was happy with the reduction but felt that there would be little effect.

“We hope the prices of other goods will go down as well, otherwise it really makes no difference,’’ he said.

Civil servant Karim Jaabar, 37, said it was nothing to rejoice about if the prices of goods remain the same.

Administrative executive Theresa Heng, 49, said it was better than nothing.

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Prime Minister Datuk Seri Abdullah Ahmad Badawi is asking everyone to pray that oil prices stay low. Why don't he ask everyone to pray that Petronas to discover a huge oil well beneath South China sea ?

Oil prices are affected by supply and demand. The only logical way for the price to drop is to reduce the global demand. And that would be very drastic, like removing cars using petrol from the roads, generating power plants using alternative energy, stop using heavy machinery and so on and so forth.

The glut in the oil prices is temporary and it won't be long that the price will go up again. But is Malaysia prepare for the next increase in oil prices ?

-------------------------
TheStar

Pray that oil prices stay low, says PM

PUTRAJAYA: Petrol pump prices will be reviewed again on Oct 1 and if the present trend of crude oil prices continues consumers can expect some good news.

“So, please pray that the fuel prices won’t climb again or better yet, for it to drop further,” said Prime Minister Datuk Seri Abdullah Ahmad Badawi.

Abdullah said that if world market prices for fuel remained stable at US$109 for the rest of the year, Malaysians might even enjoy another 15 sen drop below the current rate of RM2.55.

“We will have to wait until the pump prices are revised come Oct 1 or by the middle of that month under our calculation formula.

“If world prices remain at US$109 per barrel until the end of the year, we can reduce prices by another 15 sen,” he said here yesterday.

However, he warned that prices could also go up if the crude oil prices increase.

On the ringgit weakening against the US dollar, Abdullah said the Government would not intervene.

“The value has dropped but not to a level that is too drastic or worrying.”

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Ahmad Husni Hanadzlah, Deputy Finance Minister mentioned in the Dewan Negara that an average worker will have about RM120,000 in his Employee Provident Fund (EPF) account by the time he reaches the age of 55. However, 20 years from now RM120K would probably worth RM60,000, after 50% devalue.




At the rate the oil prices is going up and the loom recession and inflation, RM12oK savings probably worth RM12,000 (of current value).

And as usual, their is no plan or policy from the government to safeguard the income of retired workers. Rising oil price will jack up prices of all goods and services and average worker like you and me will be forced to dig deep into our pocket for spare cash, leaving us little or no savings.

Without stable income, the farmers and other individuals who are self-employed will even face harsher time by the time they retired.

Related posts:
* High oil prices affect padi planters in remote Sarawak

~~~~~~~~~~~~~~~~~~~
Extract from TheStar

Average worker will have RM120,000 in EPF

By ZULKIFLI ABD RAHMAN

KUALA LUMPUR: An average worker will have about RM120,000 in his Employee Provident Fund (EPF) account by the time he reaches the age of 55, Deputy Finance Minister Datuk Seri Ahmad Husni Hanadzlah said in Dewan Negara on Monday.

He added that the amount, which was calculated based on the person's working life of 30 years, would provide him with an average of RM500 in monthly returns for 20 years after reaching 55 years.

Ahmad Husni said the amount would enable him to meet basic expenditures.

However, the person must contribute more than RM120,000 to his EPF account to enjoy a more comfortable retirement life, he told Senator Ikhwan Salim Sujak.

Ahmad Husni said the EPF had strategies to ensure workers were prudent with their savings and they should invest their savings in proper schemes.

He also said EPF contributors were allowed to withdraw from Account II to buy a house or a second house if they had settled the loan on their first house.

To a question, Ahmad Husni said there were no plans to compel contracted or part-time workers to contribute to the EPF.

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Yesterday afternoon, I received an SMS from a friend from Sabah, saying that Kota Kinabalu traffic came to a halt because everyone are queuing up at petrol stations to top up their tank due to some news saying that the petrol stations will close their business for three days starting today. That traffic jam in turn make more suffering to other people and business.

Then the news spread to Sarawak. The news or rumours triggered panic buying of petrol in East Malaysia.

Malaysian are a bunched of immature KIASU and KIASI. KIASU in Chinese Hokkien is scare to lose (in Malay it is Takut Rugi) and KIASI in Chinese Hokkien is scare to die (in Malay it is Takut Mati).

The rumour is totally fake. There is no way the petrol station going to close their business en-block. Petrol station have the obligation to sell petrol so long as their station have stock. If they closed their station, I can tell you that two things will happen to the oil retailers (or petrol station operators):
1. There will be a lot of Police reports and those operators will be sued by angry public
2. Or enraged public will burn down the petrol station.

No matter how dissatisfied the petrol station operators are with the oil companies (oil company raising their rental) and the banks (bank have increase their credit card commission), they have no right to close their station. Imagine the essential transportation vehicle like ambulances, taxis and buses stranded in the middle of the road without fuel. Imagine parent having their children stranded at school because their car run out of fuel. If those thing happen, the petrol station operator WILL GET REPERCUSSION from the public. I'm certain of it. Maybe myself will take matter in my own hands.

So to those Malaysian who are KIASU and KIASI, please make better judgment on those rumour. If the people continue to be KIASU and KIASI, it will make it even easier for the government to manipulate them with fake news.







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Source: thestar.com.my/news/story.asp?file=/2008/6/25/nation/21648054&sec=nation

Rumour leads to jams at Sabah kiosks

KOTA KINABALU: Petrol stations throughout Sabah saw long queues of panicked vehicle owners after word spread that the stations were closing for three days.

The panic-buying started at about 3pm, and queues at petrol stations caused massive traffic jams.

At 5pm, the police were forced to go around in patrol cars and advise people by using loudhailers not to resort to panic-buying as there was no truth to the rumour.

In some interior areas like Keningau, the queues stretched for more than 2km. Some stations even ran out of petrol.

Sabah Shell Corporate Affairs and Government Relations for Sabah / Labuan head Datin Lucy Yong assured customers that there was no truth to the rumour.

“Shell retail stations nationwide will remain open during normal operating hours and will continue to accept credit cards and subsidised cards,” she said in a statement.

A Domestic Trade and Consumer Affairs Ministry spokesman warned kiosk operators against going on strike to demand higher commissions.

Sabah Petroleum Dealers Association president Charles Soong said dealers in the state were only suspending credit card sales following an association directive.

In Miri, hundreds of heavy vehicles were seen queuing up at petrol stations.

It is learnt that in Lawas, the northernmost exit point from Sarawak into Sabah, there was also panic-buying of petrol.

High prices of oil has indirectly taken a toll the productivity of padi planters in remote Sarawak. Cost of weedicide (herbicides or weeds killer) and fertilizers has skyrocketed and has greatly burdened those poor farmers.

Those poor farmers sustained their living by planting padi and other crops thus they lack cash unless they can sell their produce.

It has become uneconomical for them to plant padi if the cost of those herbicides and fertilizers are not reduced by the government. Planting padi has thus becoming an expensive affairs.

On government's part, giving fuel subsidy rebate to motorist is unfair since the that same benefits are not channeled to the poor farmers. This is the case of poor become poorer.

Image source: adventureworldtravel.com







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Costly weedicide takes its toll on padi planters

By Mary Francis

MIRI: Drastic upsurge in the price of weedicide of late is believed to be forcing padi planters in the state to substantially reduce the size of their farms or totally abandon the activity.

Many claim it is no longer economical to pursue the venture as they could hardly make any profit from it while some say they may continue planting the crop but only for their own consumption.

The residents of Sungai Liam Atas in Bakong, Baram, about 35 kilometres from here are an example of padi planters who are pressured by the situation to leave the activity which they had diligently carried on for generations.

And as an alternative they may resort to planting oil palm or tapping rubber, said a farmer Inggok Unya of Chabu Makum longhouse in the area.

“The price of weed killers has increased tremendously and the price is beyond our financial means.

“Unless the price is reviewed, we have no choice but to forego our padi farms for good and look at other things for survival,” she said.

When asked, Inggok, in a recent interview with The Borneo Post at her longhouse, said they needed weedicide to eliminate weeds in their farm before planting padi.

According to her, most villagers in Sungai Liam planted wet padi which is more convenient and easier to plant.

In the past when weedicide was still cheap, Inggok and her family planted vast areas with padi and they even sold their produce to traders.

During each harvesting season, the family bagged about 60 sacks of rice.

However, following the price hike in weedicide, she said they merely planted the crop for their own consumption and managed to get only about 30 sacks.

Except for those who depended solely on rice for their income, the others would resort to planting oil palm or other crops, believed Inggok, whose husband is working offshore with an oil and gas company.

Inggok’s mother, Kumu Biong, who was also present during the interview, said as the price of weedicide increased, the farmers had no alternative but to increase the price of the commodity.

Currently the ‘kampung rice’ is sold at RM15 per gantang compared to RM10 per gantang prior to the inflation.

“We are blamed for increasing the price. The customers grumble over the price hike,” she said, adding that they did not see the dilemma they were in.

She said a brand which used to cost between RM55 and RM57 (five litres) in the past now costs more than RM90.

The ex-prime minister of Malaysia and the adviser to Petronas, Dr. Mahathir Mohamad's respond and view on the recent oil price increase is drafted in such a manner that is quite easy to comprehend. Much easier to understand than the government signals on the imminent withdrawal of the fuel subsidies.

Some of his interesting paragraph extracted from his post are listed below:

1. The Government has now announced an increase in petrol price by 78 sen to RM2.70 per litre, an increase of more than 40 per cent.

2. Roughly Malaysia produces 650,000 barrels of crude per day. We consume 400,000 barrels leaving 250,000 barrels to be exported.

Three years ago the selling price of crude was about USD30 per barrel. Today it is USD130 – an increase of USD100. There is hardly any increase in the production cost so that the extra USD100 can be considered as pure profit.

Our 250,000 barrels of export should earn us 250,000 x 100 x 365 x 3 = RM27,375,000,000 (twenty seven billion Ringgit).

But Petronas made a profit of well over RM70 billion, all of which belong to the Government.

By all accounts the Government is flushed with money.

3. But besides petrol the prices of palm oil, rubber and tin have also increased by about 400 per cent. Plantation companies and banks now earn as much as RM3 billion in profits each. Taxes paid by them must have also increased greatly.

4. Malaysia is short of manpower. The labour intensive industries are not benefiting Malaysians. Foreign workers are remitting huge sums of money home.






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Idris Jala the MD of Malaysia Airlines is correct when he said that there is no global shortage of fuel. Worldwide supply is definitely limited and almost reached it's supply peak. Once reaching it's supply peak, fuel supply will start to decline resulting in lesser supply of fuel to the market. Only when that happen, there will be shortage of fuel. Vehicles will queue at the petrol stations, other equipment may stop operating and there could be chaos and riot on the street.

And for the time being or maybe in the next 5 to 10 years, there should be enough fuel supply. But why did Malaysia government under the leadership of Badawi suddenly panic and intend to remove the fuel subsidy immediately ?

Due to decreasing oil reserves, fuel price is definitely going to increase but not as sudden 40% jump especially if the rakyat is not prepare for them. It is guaranteed that once the oil price shoot up, everything else shoot up. Badawi is taking a drastic change too fast.

And there is no government policies or plans to cushion the effect and ensure that the rakyat is not too burden by the increase in oil price. I think he is ill advised by his Minister of Finance and he should let Idris Jala to consult him on national economy and market situation.

MD Updates:
* Jul 15, 2008: Who is Idris Jala




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Source: thestar.com.my/news/story.asp?file=/2008/6/5/nation/21450808&sec=nation

Idris: There’s no global fuel shortage

By WONG SAI WAN

ISTANBUL: There is no shortage of oil in the world and its present price level was driven up by unreal speculation, said Malaysia Airlines managing director and chief executive Datuk Seri Idris Jala.

He said the present oil price at over US$135 was unrealistic and based on certain global events that might have caused a shortage of supply.

“These people (speculators and hedge funds) buy oil futures and say that this or that event may cause an oil shortage.

“Not very long after this, people react to this and by then the message would be ‘there is a shortage of supply’ even though there is none,” Idris told the international media here at the close of the 64th International Air Transport Association annual general meeting.

IATA, which is an association of legacy full service airlines with over 200 members, had issued a statement at the end of its meeting that the industry was now in a state of an emergency because of the fuel price crisis.

Idris was a former senior executive with Shell Plc based in London and the Hague for almost 20 years. While there, he had headed various departments, including business development.

Speaking as a former oilman, Idris said there were two ways to see whether there was an oil shortage.

“First, look at the oil tankers at sea. If they are not moving and just floating out at sea, that means they have no crude or processed oil to transport. That is not happening and that means there is no shortage.

“Second, go to the petrol stations. If there are long queues, that means there is a shortage. Again, this is not happening and this can only mean there is more than enough supply.

“As an ex-oilman, I tell you there is no shortage.”

Idris pointed out that certain analysts and financial companies that produced reports about the shortage were also oil futures traders.

Asked what he thought was the fair value of crude oil at present, Idris replied: “US$40.”

He also criticised speculators and hedge funds, saying that he did not trust anything that he could not touch.

“I always believe in the brick and mortar – something I can touch. These people are trading with nothing.

“Many years ago, we at Shell had wanted to buy Enron. I was leading the team then and we hired over 60 consultants to study how a company with no oil fields, refineries or gas stations could make so much money.

“One of the consultants tried to convince me to recommend to the Shell bosses to buy Enron but I said no because I could not touch what they were trading in,” Idris said in the one-hour briefing for the media about MAS’ performance and future.

He only expressed his opinion on the oil crisis after being asked by several journalists.

Idris was proven right on Enron because the so-called energy company collapsed four years ago under massive accounting fraud.

.