05 January 2009

Happy New Year 2009

It's 2009! Welcome once again to this humble page. My humble apologies for the lapse in posts. Crude oil prices have climbed since the historic low in December. In early January the price of crude oil was slightly above USD46 per barrel. [Source: Yahoo! News, 5 Jan. 2009. Oil Supported Above $46 as OPEC Cutbacks Take Hold] As of today it is USD39.18 per barrel. [Source: New Straits Times, 14 Jan. 2009. Petrol Prices Likely To Stay] Several factors have contributed to the price of oil rising again.

First, there are the cuts in production by members of the OPEC cartel.

Second, there are interruptions in supply of petrol. Nigerian reports indicate that Nigeria's oil pipeline have been damaged. At the same time, Israel has invaded the Gaza Strip. Nobody can say if the invasion has affected oil supply yet at the same time there is also no way of negating the proposition. [Ref: Yahoo! News, 5 Jan 2009. Ibid.]

In various countries, there are petrol shortages. In Tanzania, fuel shortage resulted when the flow meter broke down while a ship was discharging petrol. (The flow meter measures the exact amount of fuel discharged for taxation purposes.) [Source: DailyNewsOnline, 14 Jan. 2009. Fuel Shortage Starts To Ease.] In Uganda, fuel shortage resulted when there was high demand. [Source: New Vision Online, 2 Jan. 2009. Petrol Shortage Persists, Diesel Enough.] Interestingly enough one commentator said that parts of Africa may continue to face petrol shortages until Kenya's plans to build a pipeline are completed. In facing the petrol shortage, the government of Rwanda recently imposed petrol rationing of a maximum of 20 liters per day. Further, the country manager of Hass Petroleum Rwanda explained that petrol scarcity was caused when one petrol vessel was stopped because it did not meet the required standards. [Source: AllAfrica.com, 8 Jan. 2009. Rwanda: The Inside Story On The Regional Fuel Crisis.]

Malaysians need not worry. The 2009 Budget looks good. The Edge Daily reports:

A host of items are now tax exempted and they include petrol card or petrol allowance for travel between home and work place for up to RM2,400 a year, petrol allowance and toll card for official duties up to RM6,000 a year, allowance or fees for parking, meal allowance and subsidies for childcare of up to RM2,400 a year.

[Source: The Edge Daily, 12 Jan. 2009. Tax Matters To Look Out For in 2009.]

Our fellow Malaysians will also be delighted to know that the Government has come up with a way to decide how they will price petrol and how tax or subsidy will be imposed. According to the Sun Daily:

"The method used now is, if it is below the threshold price, the government will impose tax, if it is above it, the government will issue subsidy. As of now we have yet to decide on the threshold price. It could be either RM1.80 or RM1.90."
[Source: Sun 2 Surf, 6 Jan. 2009. Shahrir: Petrol Won't Be Lower Than RM1.80 Per Liter.]

Cuts in petrol prices are always good. Even Asian Development Bank Executive Director Ashok Lahiri says:
... it make sense to decrease prices when global prices fall, when global price increase was not fully passed on to the consumers.

[Source: The Economic Times India, 14 Jan. 2009. ADB Questions Logic Behind Petrol Price Cut.]

Wishing everybody a wonderful new year. Petrol prices was RM1.80 per liter (the last time I checked) and hopefully it will last.