As one of the lowest Petrol price in the world besides Brunei, It is impossible for the policy maker to adjust the price of Petrol to a cheaper level compared to the price now. One thing I want to stress on here is, low oil price century is over. Not only Malaysia is facing the problem, but also all over the world.
From the economic side, when the demand is higher, while the unstable political issue affected the supply of oil, the world oil price will go up. In the end, the suppliers will gain a lot of profit from the increase of price, while the consumer will facing inflation. Malaysia is one of the oil supplier, Petronas will definitely winning in this situation. However, as usual, the big proportion of profit will goes to subsidy.This is the reason why Petrol price is lower in Malaysia compared to others.
Ther are portion of people arguing: since the profit goes up, the subsidy should be more. In a very common sense, yes the statement is true.
But the truth is, In Malaysia, We have several Petrol Companyies, like Shell, Mobil, BHP, and….. not only Petronas. If the policy maker subsidize more, the development of Malaysia will be hanging in te middle, because Petronas is the biggest contribution to the income of Malaysia.
The profit from Petronas should well-allocating according to the needs, and future aspects (Investment, Improve human capital standard, and Technology) of Malaysia, but not short term vision. Please bear in mind, Oil in Malaysia will finsih one day, maybe in a very near future. Until that time, Malaysia will become importer of oil, in stead of export. IF Malaysia development is not in a good, mature and competitive position for every sector during that time, I really can’t imagine how the Malaysian goverment generates income for continuing the development, increase the corporate tax and income tax??
In my opinion, the increase of Petrol price is probarbly within the coming 6 months, depands on the trend of international Oil Price, demand and supply in the coming days.
Filed under: General issue | Tagged: Malaysia, Oil price, Petrol, Petronas, subsidy
