International Petrol Price Dips Below USD100 per Barrel

It has been some time since I last wrote a post on the Petrol Malaysia dotcom blog. The international price of petrol has been slipping. The OPEC website listed the basket price of petrol as USD$95.29 as of 11th of September 2008. This drop in oil price has been applauded by many hard hit consumers, who expect national governments to implore oil retailers to lower their prices. It is the first time the international price of petrol has dipped below USD100 per barrel since April. Still, many oil retailers continue to sell petrol at elevated prices, following the jump in the international price of petrol to USD$147 per barrel. 

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.

Comments

Shah Jehan said…
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.
September 16, 2008 at 5:01 AM
The Archives said…
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.
November 23, 2008 at 6:53 AM
The Archives said…
This comment has been removed by the author.
November 23, 2008 at 6:53 AM
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