Oil at US$10?

If oil slumps to US$10, how happy will we be?
Toh May Fook Jun 13, 08 4:26pm

Thomas Freidman deliberated on the impact of the wealth that comes with the endowment of oil on various oil-rich nations around the world and concluded that in many of these ‘less developed nations,’ oil is actually a curse rather than a blessing. It actually promotes indulgence of every sorts, mis-allocation of resources, complacency, poor governance, abuse of executive powers, corruption and all sorts of other social and political ills.
Back in our country, revenue from Petronas has contributed to 33% of the government’s annual budget, so we were told, but the accounts of Petronas are not made public and that leads to all sorts of negative speculation from concerned citizen.
It defies logic that a national institution as important as Petronas - which has contributed so much to the nation - does not want to be transparent and gain even more respect from all fellow Malaysians. Unless as they say, ada udang di sebalik batu.
The pump price of fuel has risen to a point that threatens the livelihood of most ordinary rakyat and right thinking citizens cannot accept the logic offered by the government. This can easily lead to political instability.
As the issue has reached crisis proportion, it is ridiculous that the government still does not deem it necessary to open up the accounts of Petronas together with a comprehensive public review on the state of affairs in Petronas.
As Petronas is headed by a respectable and very qualified accountant, Hassan Merican, we are hopeful that if given the mandate, he can explain how when the price of crude oil increases, a net exporting country can justify in complaining about the burden of heavier subsidy for the amount consumed domestically.
We are not talking about the justification of subsidy, we are merely asking what does ‘subsidy’ mean in this context.
Further, when the budget was deliberated the year before, what was the reference price of fuel which enabled the government to obtain 33% of its budgetary needs from Petronas through various forms of taxes? Now that the current oil price is deemed unexpectedly high, wouldn’t our government derive even more from Petronas from such various taxes?
If a net oil exporting nation is suffering so badly when oil price increases, does it mean that all Malaysians, politicians included, should be jumping up and down in uncontrollable joy if the oil price slumps to US$10 per barrel tomorrow?
Putting all the above aside, what about the 2,500 km peninsular gas pipeline project linking our rich gas reserve from Tok Arun in Kerteh to every part of Peninsular Malaysia that commenced since 1984 and was completed in 1993? Hundreds of millions were invested but for 15 years very little were done to benefit the rakyat.
For a long while, the only NGV station in Klang Valley was near the surau at KLCC which caused massive congestion and some years ago, another one was available in Sri Hartamas and that also caused congestion but also brought much delight to the station owner over his monopolistic rights.
Obviously, within those 15 years and especially during the last ten years when the oil price began to escalate aggressively, many NGV pumps should have been installed and in fact, Proton and Perodua vehicles should have been fitted with NGV tanks instead of petrol tanks.
That alone will make those two the hottest selling brands in Malaysia and there is no need for APs and other silly protections for our auto industry and for such as hefty import duties for imported vehicles.
Yesterday, a certain minister expressed relief that car owners are rushing to install NGV tanks in their vehicles and the minister went on to explain that the government planned to have 200 NGV stations by year end but due to technical problems, there will only be an addition of 24 more on top of the current 76 NGV stations.
Hassan Merican said we have 96 NGV stations at the moment and due to problems on land acquisitions and problems with local authorities, we may have 200 NGV stations only by 2010.
Our government is about to collapse and for 15 years, Petronas could not solve land acquisition problems and could not deal with our local councils to bring much cheaper and cleaner fuel to the rakyat.
Fifteen years since the peninsular gas pipeline was completed, with proven strong demand for the NGV, our nation will only have 100 NGV stations and mostly in the Klang Valley. Brazil and even Pakistan have more NGV stations though they had much less natural gas reserves than Malaysia.
Proton and Perodua are not marketing their products according to our god-given national competitive advantage and our rakyat are compelled to pay RM2.70 for petrol instead of 68 sen for NGV for the same function and even cleaner environment.
We need someone to answer all the above strange phenomena, or is this simply what Mr Freidman described as ‘the curse of oil’?