However, OPEC has become cautious at the slowing demand for petrol. OPEC recently ordered its cartel members to cut production by 530,000 barrels of oil per day. President of OPEC, Chakib Khelil, was quoted:
"My hunch is probably the price still will be going down despite the decision that we made."
"I don't think this will affect the consumers in any way because first of all, there's an oversupply. Everybody agrees on that."
Source: Sky News (UK), 10th Sept 2008, Opec Oil Cut Plan Comes Under Fire
Meanwhile, Malaysian analysts do not foresee the sliding price of petrol to help much as the ringgit has depreciated against the dollar (6.5% over the last two months). The Edge Financial Daily reports,
Malaysia is expected to continue seeing high inflation despite the recent decline in crude oil prices, as a weaker ringgit has partially offset the positive impacts from lower oil prices, according to economists.
Source: The Edge Financial Daily, 15th Sept 2008, 15-09-2008: Falling oil price yet to ease high inflation, by Gan Yen Kuan
It looks like there may be uncertain times ahead. Add that to the current economic climate, I think it will be good to learn some frugality. The advice that old folks used to give, saving for a rainy day, is good advice.
3 comments:
Kevin, thank you very much for doing the service of keeping track of the oil prices. But to have depreciating ringgit as a setback. How sad. Frugality, of course. By the government as well. I guess the Backbenchers agricultural study tour to Taiwan was financed by BN themselves? Hope so. If not, it will seem that the government is not doing what they are actually preaching. They are asking the people to change their lifestyle and resort to farming but are they actually effectively cutting costs at their end? Hope the audit people will keep track of that and get us informed.
With petrol prices at par with the earning value of most Malaysians, it must mean a drop in Petronas cash cows.
Will the reduction of petrol prices last? Nothing is forever, everywhere is drying up so why the virtual decrease?
Hopefully the government won't bust it up again with a hefty 30% increase when the going gets rough.
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