31 January 2009

Happy Federal Territories Day

1st February 2009 is Federal Territories Day, or better known as Hari Wilayah Persekutuan. It is a public holiday, but since it falls on a Sunday this year, tomorrow will be a public holiday. The Federal Territories in Malaysia consist of Kuala Lumpur, Putrajaya and Labuan. Of the three, Putrajaya has been the newest area to be added. It was the brainchild of Tun Dr Mahathir, in an effort to move traffic congestion away from the nation's financial capital. The creation of an administrative centre was an effort to mimic Washington's relation to New York. The other territory, Labuan, is famous as an offshore financial centre.

The problem of congestion in Kuala Lumpur has abated somewhat. The city seems to be growing outwards. More and more businesses are moving their premises to new locations, where rentals are cheaper and they can access new client bases. New highways and the extension of the light railway train (LRT) also contribute the decisions of urban folks who have decided to move to the fringes of the city.

The sprawling area of Kuala Lumpur is a hodgepodge of new roads and old roads. Some roads remain narrow, with two lanes -- one for each direction. Bottlenecks become evident during peak periods of traffic. The solution is that public transportation must be improved to better serve the residents and commuters in the city. Yet an expectation that public transportation will increase runs counter to the aspirations of the government to boost sales of the national car.

One solution to the traffic problem is to encourage usage of public transportation. The government can encourage commuters to use public transportation and to subsidise LRT charges and taxi fares. LRT can be improved so that it becomes conducive to bring bicycles and scooters aboard. Pedestrian walkways may be improved by adding shade and/or canopies whenever possible. Bus stops and taxi stands must be better lit. To improve security for pedestrians, policemen may be equipped with motorized bicycles or mopeds to go about their rounds. Multi-storey car parks powered by solar panels may be constructed nearby public transportation hubs. Finally, areas of the city may be cordoned off to allow only buses, bicycles or motorcycles, effectively shunting off cars.

Aside from that, the government can itself ease traffic congestions by upgrading infrastructure. Highways to link disparate areas may be considered whether by way of underground tunnels or elevated roads. Reduced toll during off-peak hours (e.g. after midnight until 6.30a.m.) may be considered by the Government, subject to compensation to concessionaires. More petrol stations should be allowed to sell natural gas (NGV) to members of the public.

The Federal Territories are not all created alike. Some of them came about through historical factors, most notably the area of Kuala Lumpur. Its ever expanding borders means that development is continuous and spills into areas like Petaling Jaya, Ampang, and Gombak. Concerted effort must be made so that infrastructure upgrading is continuous and does not stop at the border of the postcode. It may be noted the Federal Territories comes direct under the Federal Government (governed by their respective bodies, e.g. DBKL, Perbadanan Putrajaya, Perbadanan Labuan) whereas adjecent areas are under the care of the Selangor (opposition) state government. For the sake of the rakyat, all parties should work together in a concerted effort to improve the problem of traffic congestion.

Happy Federal Territories Day.

21 January 2009

Angkat, Tolak, Masuk, Picit

Just today I went to a petrol station. It was an Esso station, to be exact. I picked up the pump and filled up the car myself. While filling up the petrol, I noticed that the dock of petrol pump (once you took out the pump) had a little lever. You can flip it up. And then I remembered: Somewhere about 10 years ago Malaysians were introduced to the concept of "Angkat, Tolak, Masuk, Picit". It translated roughly to, "Lift, Push, Enter, Squeeze".

A long time ago, there were petrol attendants who filled in petrol for the motorist who pulled up to the petrol station with his ride of choice -- be it BMW or Proton Saga. It was good for the motorist to go to the petrol station and be asked, "Mahu berapa?" ("How much?") In those days, the petrol attendants received the payment at the pump and proceeded to fill in the petrol for you. You felt like you were paying them for a job well done, which was often the case. Then somewhere along the line some people (if I recall correctly) started complaining about the number of foreign workers in Malaysia. Some people also came up with a way of making petrol stations run more cost effectively. And the "Angkat, Tolak, Masuk, Picit" campaign was born!

Basically it meant that:
  1. You angkat (lift) the petrol pump from its dock;
  2. You tolak (push) the little lever in the middle of the dock up, which usually activated the pump;
  3. You masuk (enter) the nozzle into your gas tank; and
  4. You picit (squeeze) the little trigger that made the petrol pour into your gas tank.

Nowadays we need not do the "tolak" step. Just lift the petrol pump from the dock, enter its nozzle into your gas tank, and squeeze the trigger. But now since I handle the petrol pump myself (instead of some anonymous petrol pump attendant), I make sure to squeeze the trigger a little softer. I heard that if the flow of petrol is slower, you can wind up having petrol at the petrol pump.

While on that topic, I browsed the 'Net as I was certain that a number of writers had written about maximizing your fuel economy, especially during the USD147 per barrel period. Here are some tips to get more out of your petrol.
  1. Pump petrol in the early morning or after the rain. (Reason: Less evaporation)
  2. Fill up your tyres to the recommended pressure. (Reason: Fuel economy)
  3. Change the engine oil regularly. (Reason: Fuel economy)
  4. Squeeze the petrol pump trigger softly. (Reason: More petrol)
  5. Fill up when the tank is half full. (Reason: Less evaporation of fuel)
  6. Leave the nozzle in the car for a while once you are done filling. (Reason: Collect drips of fuel)
  7. Don't fill up when a tanker is filling at the station's tank. (Reason: Sludge in station's tank)
  8. Plan your route. Try not to take unnecessary trips. (Reason: Less miles travelled)
  9. Remove unnecessary things from your car. (Reason: Less burden)
  10. In order of preference, your toll paying habits should be: SmartTAG, Touch N Go, and cash. (Reason: Queue)
  11. Clean air filter regularly. (Reason: Engine airflow)
  12. Drive at a moderate, constant speed. (Reason: reduce aerodynamic resistance)
  13. Prevent idling.
References:
  1. AndyMervinGeorge.com, 6th Nov. 2007. Tips to get MORE at the petrol pump. URL: http://andymervingeorge.com/2007/11/tips-to-get-more-at-the-petrol-pump/
  2. DailyMail.co.uk, 19th Jan. 2009. The pages that save you money every single day: Slam the brakes on car costs. URL: http://www.dailymail.co.uk/news/article-1121437/The-pages-save-money-single-day-Slam-brakes-car-costs.html
  3. Auto Trader UK, 12th Aug. 2008. Money-saving tip: Fill up at the pump correctly. URL: http://www.autotrader.co.uk/EDITORIAL/CARS/FEATURES/ADVICE/OTHER/money_saving_tip_of_the_day_fill_up_at_the_pump_correctly.html
  4. David Tan.org, 21st Apr. 2008. How to save money on petrol and gas. URL:http://www.davidtan.org/how-to-save-money-on-petrol-and-gas/
  5. TechARP.com, 18th Aug. 2005. 12 Tips to save Petrol. URL: http://forums.techarp.com/lounge/17030-12-tips-save-petrol.html
  6. Myself. I wrote some of them based on conversations with friends, etc.
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However, seeing as RON 97 petrol is presently RM1.80 per litre and RON 92 is only RM1.70 per litre, most people will probably feel no reason to curb their petrol usage and/or increase their fuel economy. So, instead of the above, readers of this blog may be more interested in the history of petrol pumps. One such place is the BP Archive blog (hosted at Warwick University's website).

19 January 2009

Crude Oil Prices Fall Again

According to Bloomberg, crude oil prices fell again today to below USD$35 per barrel. The reason: Forecasts by industry insiders that global recession will lead to cuts in petrol consumption. The analysts are, however, positive that the second half of the year will see the price of crude oil bouncing up again.

The fall in crude oil prices is despite a production cut by OPEC. An industry insider with Nordea Bank AB in Oslo stated it simply: "Demand is falling faster than oil producers are cutting production. As long as OPEC are one step behind, prices will continue to fall." [Source: Bloomberg.com, 19th January 2009. Crude Falls on Forecasts Global Recession Will Cut Fuel Demand] OPEC produces about 40% of the world's supply of crude oil. [Source: The Edge Daily, 31st December 2008. 31-12-2008: O&G sector to lose a bit of fluidity in 2009]

What would a bearish outlook for the O&G sector mean? Mergers may take place as companies consolidate their resources to face tough times. Large companies may also buy up smaller companies without much cash to cushion against a protracted recession. Exploration and "greenfield" projects may slow down as they attract less funding pending feasibility studies. Marginal fields and oil sands projects may also slow down. [Source: The Edge Daily, ibid.]

How does one explain the recent spike in crude oil prices then? Industry insiders say that any unrest in the Middle East (most recently, the invasion of Gaza by Israeli forces) will cause oil prices to escalate. They expect the prices of petrol (gasoline) to fall again, due to slowing demand, a global recession, and stockpiles of oil and oil based products. [Source: The Republican, 9th January 2009. Gas Prices Like Ride on Roller-Coaster]

Foreign Policy magazine had a run-down on the possible winners and losers in the forecasted economic downturn, in the context of the oil industry. [Source: Foreign Policy, 8th January 2009. Winners and Losers of the Oil Crash] These are, in short:
  • Saudi Arabia - A winner because it will be less affected by the oil crash than other oil producing countries.
  • India - A winner because it will have less need to subsidise petrol prices. Local O&G companies can also compete in international upstream acquisitions.
  • International Oil Companies (IOC's) - Winners because cheaper oil means less research and development (R&D) on alternative fuels. Governments will also be forced to grant access to oil reserves to IOC's. Having lower profits also stalls President Elect Obama's plans to impose windfall taxes on IOC's.
  • Russia - A loser because it is the world's largest oil producer and has invested heavily in production capacity in recent years. Production has slowed down in existing fields and new sites require capital injection.
  • Frontier markets - Losers because junior (minnow) exploration companies that scour for oil reserves in small states with emerging economies, now have less investment.
  • New Energy Technologies - Losers because cheaper oil will discourage research and development into alternative, new energy technologies. These include: "biofuels, coal-to-liquids, oil shale, and many types of oil sands technologies."
Oil sands technologies cost oil production at about Canadian $10 per barrel. This includes Canadian $4 per barrel for electricity costs. [Source: Energyinvestmentstrategies.com, 19th July 2008. New Oil Sands Technologies]

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.