Petrol Malaysia

Bloggin' Abt Oil/Petrol and Related Events/News from Kuala Lumpur, Malaysia.

RON95 and Diesel Prices To Be Based on Managed Float

21 November 2014

Dear Reader

The retail price of RON95 and diesel will be based on a managed float from now on. Here is the press statement for the announcement, which I received from a friend:

KENYATAAN AKHBAR
PELAKSANAAN PENGAPUNGAN TERKAWAL (MANAGE FLOAT)
BAGI PETROL RON95 DAN DIESEL

Dimaklumkan bahawa Kerajaan melalui Mesyuarat Jemaah Menteri hari ini telah memutuskan bermula dari 1 Disember 2014, penetapan harga runcit bagi petrol RON95 dan diesel adalah mengikut kaedah pengapungan terkawal (managed float). Kaedah ini adalah sebagaimana pelaksanaan penetapan harga runcit RON97 sedia ada sejak Julai 2010.

Harga runcit produk petroleum di Malaysia ditentukan melalui kaedah Automatic Price Mechanism (APM) sejak tahun 1983. Melalui APM, Kerajaan akan menetapkan harga runcit pada satu paras tertentu dimana perubahan kos produk tidak akan mengubah harga runcit. Walau bagaimanapun, melalui pengapungan terkawal (managed float) ini, purata perubahan kos produk akan menentukan penetapan harga bagi bulan berikutnya. Ini bermakna jika harga pasaran minyak mentah dunia meningkat, harga runcit RON95 dan diesel juga akan meningkat. Begitu juga sebaliknya.

Sebagai contoh daripada 1 hingga 19 November 2014, purata harga RON95 di bawah APM menurun kepada RM2.27 seliter yang mana lebih rendah daripada harga runcit RM2.30 seliter. Dalam hal ini, Kerajaan akan memantau harga pasaran pada 20 hingga 31 November 2014 dan jumlah sebenar akan menentukan purata harga runcit pada bulan Disember. Jika trend ini berlarutan, adalah dijangkakan harga runcit RON95 bagi bulan Disember akan dikurangkan sewajarnya berdasarkan formula APM.

Pada masa ini harga runcit RON95 di stesen minyak adalah pada harga RM2.30 seliter dan diesel pada harga RM2.20 seliter. Mulai pada 1 Disember 2014, penetapan harga di stesen minyak akan bergantung kepada kaedah yang disebut di atas. Kerajaan akan mengikuti perkembangan pasaran harga produk kos setiap masa dan kadar pertukaran matawang untuk menetapkan harga runcit petrol dan diesel.

Keputusan pengapungan terkawal harga petrol RON95 dan diesel dibuat berikutan kejayaan pelaksanaan pengapungan terkawal harga petrol RON97. Langkah ini membuktikan hasrat Kerajaan untuk memastikan rakyat menikmati manfaat sepenuhnya berikutan penurunan harga minyak mentah dunia.
Kajian bagi pelaksanaan pengapungan terkawal harga petrol RON95 dan diesel ini telah dilaksanakan oleh Kerajaan sebelum memutuskan pelaksanaan kaedah ini.

YB DATO’ SRI HASAN BIN MALEK
21 NOVEMBER 2014
 According to The Star's report dated 21.11.2014,

  • All subsidies for RON95 and diesel would be stopped starting December 1, 2014;
  • The retail prices would follow a managed float, similar to the mechanism for RON97 in the country; and
  • The price of RON95 and diesel for any single month would be calculated based on the monthly average price of the preceding month.

According to The Malaysian Insider on 18.11.2014, the price of RON97 went down 20 sen, to RM2.55 per liter. This is because of the effect of the managed float, which fixes the price of RON97 according to the market price of petrol.


Thus, if the managed float is implemented, the price of RON97 and diesel will go down in the near future.

Peak Oil (Hubbert's Peak)

10 July 2013

After a long while, I've decided to write a post for this long-neglected blog. One of the topics that we don't talk about much in Malaysia is "peak oil".

"Peak oil" is based on the theory formed by M. King Hubbert, a geoscientist who worked at the Shell research lab in Houston, Texas. (Source: Wikipedia entry on M King Hubbert)

In simple words, "peak oil" refers to that point in time when the production of oil in a certain area starts to decline. The production of oil in that region would follow a bell-shaped curve. (Source: Wikipedia entry on Hubbert peak theory) In other words, after production has "peaked", it becomes more difficult to produce oil.

In other words, the "peak" in peak oil refers to the peak predicted by Hubbert's theory, i.e. the top of the bell-shaped curve.

The theory is applicable to resources other than oil. Simply explained, production of oil follows the bell-shaped curve predicted by Hubbert's theory because:

a) in the early stages, the production rate of oil increases due to the discovery rate and the addition of infrastructures; and

b) at the late stages, the production rate of oil falls due to the depletion of resources. (Source: Wikipedia entry on Hubbert peak theory)

The Hubbert theory is applicable to "high grade" oil. It is not concerned with oil that is difficult to mine, but applies to oil that is easily obtained without much difficulty. (The truth is that mankind will continue to mine for oil, even in the deep sea, even with increasing costs, and even if there is a crisis of shortage -- or perhaps because of such shortages.)

A professor at Uppsala University in Sweden, Prof. Kjell Alekletts, was interviewed recently in the September 2012 edition of the university newsletter. (Source) It happened that his latest book, "Peeking at Peak Oil", was on the topic of peak oil. One of the things he said in that interview was, "The problems have to be taken seriously. We need to alter our entire lifestyle. The slowdown in oil production is one of the causes of the economic problems we are facing in Europe." Professor Aleklett's blog can be found here.

(This article will stop here for now, and be continued later....)

Tan Sri Hassan Marican Gets Singapore Job

12 March 2012

Dear Reader,

Until 2010, Petronas, Malaysia's state-owned petrol company, was helmed by Tan Sri Hassan Marican. After having left Petronas, Tan Sri Hassan was appointed to Singapore's Sembcorp Industries on that same year. Recently, The Malaysian Insider reported that Tan Sri Hassan Marican has been appointed to the board of several Singapore government-linked companies and will be appointed to head Singapore Power Limited (SP) in June this year.
KUALA LUMPUR, Feb 15 — Ex-Petronas CEO Tan Sri Hassan Marican is set to become chairman of Singapore Power Limited (SP) in June succeeding Ng Kee Choe who will retire on June 12, according to Energy Asia. The news portal that focuses on the energy industry reported this yesterday, citing the island republic’s utility giant.

Marican, who left the national oil company at the beginning of 2010 allegedly due to friction with the Najib administration, has been accepting directorships with several foreign firms in the energy sector.

Among them are Singapore government-linked companies including SembCorp Industries Limited, SembCorp Marine Limited and Singapore Power, which he joined on February 15, 2011. He is also a director at Sarawak Energy Berhad and US oil and gas giant ConocoPhillips
(Source: The Malaysian Insider, Ex-Petronas Chief to Helm Singapore Power Giant. 15th February 2012. URL: http://www.themalaysianinsider.com/print/business/ex-petronas-chief-to-helm-singapore-power-giant/)


In response, the opposition Member of Parliament and Chief Minister of Penang, Mr Lim Guan Eng, has called upon the government to take proactive measures to prevent future loss of talent. "Talent such as Tan Sri Hassan Marican does not come by every day, and our government must take immediate measures to plug this leak in order to retain such talent or risk losing him and many more like him to overseas countries," said Mr Lim. "Clearly, so long as political know-who supersedes technical know-how, negotiated deals are preferred to open tenders and there is neither full accountability nor transparency, Malaysia is fighting a losing battle to stem the brain drain." (Source: The Malaysian Insider, Guan Eng: Hassan Marican’s Singapore jobs ‘sad day for Malaysia’. 16th February 2012. URL: http://www.themalaysianinsider.com/malaysia/article/guan-eng-hassan-maricans-singapore-jobs-sad-day-for-malaysia)

I have never met Tan Sri Hassan myself, but from what I have heard, he is quite good at his job. People who are good talents need never worry about getting a job. Tan Sri Hassan Marican is a living proof of that.

Water Contamination by Diesel in Miri, Sarawak

06 March 2012

Dear Reader

The best business you could start in Miri today, is selling bottled water! People are desperate for drinking water right now because the drinking water supply has been contaminated by a diesel spill -- 14,000 liters of diesel, to be exact. On the 6th of March 2012, the New Straits Times reported:
MIRI: REPORTS of people doing extreme things when they had no water for more than 12 hours on Sunday, due to  diesel contaminating  the city's main source of drinking water, are making the rounds here. "People were using Coke and 7-Up to wash themselves after going to the toilet. One of my friends told me she used 100 Plus to brush her teeth last night," housewife Sue Abdullah said yesterday.

... Assistant Minister for Communication and Senadin assemblyman Datuk Lee Kim Shin, ..., said 300,000 people here were affected by the disruption. Lee added: "It is, however, safe for drinking and cooking." Northern Sarawak Water Board (Laku) general manager Lo Su Onn said his staff had tested the water."We even drank the water to be certain it was safe before we started resuming the supply." The city's water treatment plant at Lambir, which shut down at 8.30pm on Saturday, resumed operation late Sunday night after a clean up of Sungai Liku by teams from Sarawak Shell Bhd and Petronas.Rela members with their boats were drafted in to help clean up the estimated 14,000 litres of diesel that had spilled into the river from a ruptured skid tank, belonging to a road construction company, 2km from the treatment plant. In Kuching, Second Minister of Resource Planning and Environment Datuk Amar Awang Tengah Ali Hassan said: "If there is negligence, action will be taken."

(Source: New Straits Times, 'Diesel smelling water' in Miri. 6th March 2012. URL: http://www.nst.com.my/local/general/diesel-smelling-water-in-miri-1.56252)

300,000 people affected

300,000 people are affected by 14,000 liters of diesel that poured into Sungai Liku in Sarawak.The big question is how does 14,000 liters get into a river and not be detected immediately? Apparently part of the answer to this conundrum is that, the spillage started on a Saturday, and continued on Sunday, and because it was a weekend, nobody was around to check.

On 5th March 2012, the Borneo Post reported:
MIRI: Lebih 300,000 penduduk di bandar raya Miri dan Daerah Bekenu semalam terjejas bekalan air bersih selepas sumber air di Sungai Liku tercemar oleh tumpahan minyak diesel daripada tangki simpanan minyak sebuah syarikat swasta yang terletak dua kilometer dari sungai tersebut. Dianggarkan, sejumlah 14,000 liter minyak diesel yang digunakan untuk proses penurapan jalan yang disimpan di dalam tangki milik syarikat berkenaan, tumpah ke tanah dan seterusnya mengalir ke Sungai Liku, selepas saluran tangki tersebut bocor dan tidak disedari oleh para pekerjanya. Pengurus LAKU Management Sdn Bhd (LAKU) Kawasan Miri, Lo Su Onn yang ditemui di Loji Perawatan Air LAKU di Lambir semalam memberitahu, pencemaran itu disedari oleh pekerja loji berkenaan pada jam 8.30 malam kelmarin apabila terhidu bau diesel yang kuat dari kawasan pengambilan air.Sebaik menyedari terdapatnya tumpahan minyak, kakitangan yang bertanggungjawab menyelenggara loji ketika itu bertindak menutup operasi loji serta-merta bagi mengelak air yang telah tercemar terus memasuki kawasan penapisan dan rawatan.

“Pihak kami mula mencari punca pencemaran awal pagi tadi (semalam) dan mendapati punca tumpahan adalah daripada sebuah syarikat membuat tar jalan. Serentak itu, kita memaklumkan kepada pasukan bertindak mengenai tumpahan minyak untuk mendapatkan bantuan segera,” katanya. “Sekarang (pagi semalam) kita bergantung kepada sumber bekalan air yang sudah dirawat di loji tangki simpanan sedia ada untuk membekalkan air kepada penduduk Miri. “Namun, jumlah air bersih yang disimpan di tangki berkenaan agak terhad. Ia menyebabkan kita terpaksa mengurangkan penyaluran air untuk penduduk di bandar raya Miri mulai tengah hari supaya bekalan air tidak putus,” katanya.

Bagaimanapun, menurut Lo, bukan mudah bagi pihaknya membersihkan pencemaran itu kerana tumpahan minyak terbabit sudah meresap ke dalam tanah dan mengalir di sepanjang sungai tersebut. LAKU, katanya, terpaksa mengepam air dari Sungai Bakong untuk disalurkan ke Sungai Liku bagi membersihkan tumpahan minyak di sepanjang kawasan hulu sungai berkenaan. ...

Dalam pada itu, penduduk di Miri mulai mengalami ketiadaan bekalan air bersih sekitar jam 1 petang semalam, sekali gus menyebabkan ramai penduduk terpaksa membeli air mineral yang dibotolkan. Berita ketiadaan air yang diuar-uarkan menerusi laman sosial, media elektronik telah menyebabkan pembelian panik air mineral yang dibotolkan, sehingga barisan panjang di beberapa buah pasar raya.

Tinjauan Utusan Borneo turut mendapati beberapa buah premis kecil dan pasar raya telah kehabisan stok air mineral. Di kawasan Pujut 7, air mineral dijual di tepi jalan seperti menjual buah durian sehingga menimbulkan kesesakan jalan raya kerana diserbu orang ramai.
(Source: The Borneo Post, Pencemaran Air, Miri Terjejas. 5th March 2012. URL: http://www.theborneopost.com/2012/03/05/pencemaran-air-miri-terjejas/)



For those of you that don't read Malay, here are some of the highlights of the article:
  • The 14,000 liters of diesel were used for road tarring purposes. (Really? Have to check that out)
  • LAKU Management Sdn Bhd manager Lo Su Onn realised that there was water contamination at about 8.30pm on the night it occurred. An employee smelt the smell of diesel.
  • Operations at the water processing plant were halted immediately after the discovery to avoid contaminating the drinking water supply for domestic use.
  • The water processing plant had to rely on its reservoir, but supply of water had to be reduced as there wasn't sufficient water to supply.
  • It is not an easy task to clean up the diesel contamination as the oil had already soaked into the soil and had entered Sungai Liku. Water is being diverted from Sungai Bakong to Sungai Liku to help clean up the river.
  • The public went into panic mode and started buying mineral water. News of water scarcity, spread by social media, caused water buying panic and long queues at supermarkets. Even small malls were out of stock and in Pujut 7, mineral water sold by the road side was snapped up like durians, causing traffic jams.

Photos on Facebook

A Facebook group claiming to represent Sarawakians has posted up photos related to the Miri diesel spill. It must be noted, these seem to be posted by the opposition party in Sarawak.
  • Photo of an oil spill in general, without reference to Sungai Liku
  • Screen Capture of website for Cahya Mata Sarawak (translated as the "Child of Sarawak") , specifically Group Deputy Chairman, Dato Sri Mahmud Abu Bekir Taib
  • Screen Capture of website for CMS Premix Sdn Bhd, apparently Sarawak's leading producer of ashphaltic concrete (premix) and bituminous emulsion (emulsion).
  • Photo of Sarawakians at the site of the spill
  • Another photo of Sarawakians at the site of the spill
  • A photo of mineral water being sold from a lorry at Pujut 7
  • Photo of members of public at the site.
  • Photo of cleaning work in progress.
  • Photo of shipping containers that are used to store diesel
  • Photo of shopping cart full of mineral water bottles
  • Photo of another shopping cart full of mineral water bottles
  • Photo of diesel spilt on the soil

Possible Negligence ... and Court Case?

On 6th March 2012, the Department of Environment (DOE) was reported to have found possible negligence in their investigation of the water contamination. Here is an excerpt:
DOE enforcement chief for northern Sarawak Siva Nathiran said more than 14,000 litres of diesel-bitumen had leaked into Sungai Liku due to two serious factors. “The leak happened so extensively because it went undetected from Saturday night to Sunday morning as there were no workers at that time because it was a weekend. 

“The leakage happened at a part of the pipeline where there was a joint. The piping gave way because the joint was connected by a rubber hose which had burst. The joint-connection should have been sealed with a stronger material, not just a rubber hose. All these points to the possibility of negligence. We are now preparing our investigation papers and to file the case in court,” he said yesterday.

The diesel-bitumen leakage into Sungai Liku caused massive water supply in the city (?) for more than 24 hours due to the shutdown of the Lambir Water Treatment Plant to prevent the contaminants from entering the piped-water system. Sungai Liku is the source of the raw water for the treatment plant, which processes 125 million litres of water for the entire dis­trict of Miri.

Siva said the DOE had deployed its investigating team to the site, stating that it might take up to a week to clear the spillage on the land. As for the oil leakage in Sungai Liku, he said 44 drums of contaminants had been extracted from the river so far. “The river water is almost cleaned up. There are booms being put in place to stop the contaminated water from flowing. “However, there is still a thin layer of contaminants on the surface. It should be cleared away soon,” said Siva. He added that the premix plant management and its contractor were in the midst of “cleaning up the mess”.

(Source: The Star Online, Oil Spill Points To Negligence. 6th March 2012. URL: http://thestar.com.my/news/story.asp?file=/2012/3/6/nation/10862380&sec=nation)

I don't understand the phrase "caused massive water supply in the city". How does a leakage cause massive water supply?

I hope the court case will take place soon. From experience, oil will dehydrate and reduce in volume over time. By the time the court case is heard, "44 drums of contaminants" could be half-empty, if they are not properly sealed.

Here are some Photos of bituminous emulsion at Google Images.

Further Reading

Here are some other articles about the incident.

VST Nozzle Latches removed in California

14 February 2012

In 2010, a judge in California, USA, upheld the state's fire marshal's order for the removal of hold-open latch to be removed from nozzles manufactured by Vapor System Technologies LLC. The state's fire marshal, which is affiliated to the Department of Forestry and Fire Protection, deemed the defective nozzles to be a fire hazard.

Apparently, a manufacturing defect in VST's nozzles caused 13 incidents where petrol has been sprayed (at the nozzle) before the nozzle was inserted into the vehicle. This happened because the hold-open latch did not disengage after earlier customers used the petrol pump.

The fire marshal's order affected some 3,000 petrol stations in the state of California. The good news was that the fire marshal was working with VST and other petrol nozzle manufacturers to replace the defective VST nozzles with new, safer petrol nozzles with hold-open latches. (At least, that's what the circular dated 23rd August 2010 said.)

Customers who were frustrated with the fire marshal's order to remove the hold-open latches had used other items to keep the latches open, such as "wallets, keys, sunglass holders, tennis balls". Petrol station owners were disappointed with the order because they felt that they would lose business.

“A lot of people have lost business. A little old lady comes in to buy gas; she doesn’t want to stand there and hold that nozzle,” Campbell said. “We felt there could have been a better decision from the state.” (Source: OC Register)


What is disappointing, is the attitude of the company which manufactured the defective nozzles.
Officials from Vapor Systems Technologies said there is nothing inherently wrong with the nozzle.

Todd Sorrell, spokesman for the company, said the majority of malfunctioning nozzles had surpassed their one-year warranty when the incidents occurred. Indeed, “all gasoline nozzles, or any mechanical device for that matter, will eventually fail for some reason,” wrote Glenn K. Walker, Vapor Systems president, in a letter dated June 21, 2010, to California service stations.

The company says the nozzles were damaged by wear and tear. According to the company, every month there are 2,000 drive-offs or breakaways involving its nozzles at California gas stations. A drive-off is when a customer forgets the nozzle in the gas tank and begins to drive away from the pump. (Source: CaliforniaWatch)

Sources: