Don’t wait for PM to reduce the price of fuel

Below is an extract from one of the letters sent to Malaysiakini. And from day to day, all Malaysians are waiting for..

• the price of fuel to go down (which is most unlikely)
• PM to announce his resignation (what if he resign today?… will we be better?)
• Pakatan Rakyat to take over the country’s administration
• the cost of living to go down

While we wait..

• the price of fuel keeps burning a bigger whole in our pocket
• PM have announced that his deputy will replace him (when the time comes)
• if Pakatan Rakyat takes over, will it be better than Pak Lah administration?
• Cost of living will still be high and continues to go high.. and our only hope is to get better pay

Can Petronas reduce Malaysian petrol prices on its own?
The answer is negative. Petronas’ current total refining capacity is only 314,000 barrels of crude per day. From this amount, only about 150,000 barrels per day of petrol and diesel can be produced, the rest being LPG, petrochemical naphtha, kerosene/jet fuel and waxy residues.

The 150,000 barrels per day account for only 40% of the amount of petrol and diesel sold in Malaysia. The other 60% is supplied by foreign oil companies like Esso, Shell and Caltex. Esso and Shell have refineries in Port Dickson, whilst Caltex may be importing the products from its Singapore refinery and/or purchasing them from the Conoco share of the Melaka refinery outputs.

From the above, one can begin to understand why the petrol price control has to be through the subsidy route rather than through Petronas having to take an ‘opportunity loss’. Unless Shell, Esso and Caltex are also willing to take ‘opportunity losses’, and by how much.

Maybe you should read this too

• Leave Petronas goose alone, ask who ate golden eggs
• Don’t ask Petronas how profits used, ask…
• Parliament should be Petronas’ boss, not PM