Government Plans To Curb The Rising Oil Price (from paultan.org)

this is actually the supplement to my article 2 below.

Datuk Shahrir Samad reveals a little more on what went behind the doors at the Cabinet Committee on Inflation meeting, which resulted in fuel prices to be revised to RM2.70 per liter for RON97 fuel and the formation of a new subsidy payment of RM625 for cars with engines below 2000cc.

He also gives a preview on what to expect next when it comes to how we buy our fuel and how much we pay for it.

• The government decided to increase the price immediately instead of the before-mentioned August date as calculations revealed that if they had waited any longer, the price increase would have been different.

• The government was considering three quantums of increase: RM0.50, RM0.78 and RM1.00, which would have resulted in fuel prices of RM2.42, RM2.70 and RM2.92 respectively. Initially the committee favored RM1.00, but RM0.78 was picked because rather than setting it at RM2.42 and increasing it again to RM2.92 soon later, a one-time increase was preferred so that it has to be swallowed once.

• The RM2.70 per liter price for RON97 fuel is expected to stay for awhile (note that this does not mean a confirmation, what more in these times of conflicting government statements), with further increases in crude oil prices to be absorbed by the government. The market price for fuel will only be implemented sometime in the future where fuel prices will be reviewed every month and will be set at market price minus a fixed RM0.30 per liter subsidy.

• The RM625 cash subsidy via postal order plan is a one-off thing because for subsequent years there will be a new way to implement the subsidy with more controls as the current system has many holes in it, but was chosen because it was the quickest to implement.

• A new system based on quotas will be introduced next. The current cash subsidy is based on a 66 liter per month consumption (calculated over 10 months). The suggestion is that the new quota system would also assign 66 liters of fuel per month, but it will likely be based on a person rather than on a per-car basis as it is currently with the road-tax based system. This closes the loophole of someone having multiple cars but only really driving one enjoying more subsidies than he should be getting.

• The way to determine who should get the subsidies is still being finalised, but a MyKad-based system or something based on some other kind of card will be used to identify the person as qualified to get subsidies at the pump… apparently this year. I think the directors of ePetrol have valid reasons to be smiling in their sleep now.

The picture that Datuk Shahrir paints seems to be one of the government’s coffers running dangerously dry, so dry that urgency of reducing subsidy expenses seemed to be placed at the highest priority.

It’s sort of implying that waiting just two months and continuing to pay subsidies at the previous level for an additional two months would have such a devastating effect that even a RM2.70 petrol price could not be sustained for the next 1 year.

It’s either that or the government is playing it safe and is doing a subsidy bill projection taking into account further massive hikes in crude oil prices.

Sources: 1, 2, 3, 4, 5, 6

Barack Obama Democratic Nomination Victory Speech

I don't follow the US Election campaign but this speech really stung me right into my spine. I never can bear election speeches, not in Malaysia, I don't (with all the hatred speeches) but this 1 is exceptional. This guy is very gentlemen, he attack his opponents but in very professional manner full-supported with old and current facts. He attack not his opponents but their thoughts.

I never felt as motivated and aroused in any speech but this one really got me up my seat. I watched the half-an-hour video twice. Never thought I have such a long attention span when listening to his speech. I don't think it's his message which got me attracted primarily. It is his eloquent, informative, strong speech with no script!

He really made people believe that the changes he is about to make to America is because of their efforts and faith. He made them believe that everyone of them is part of his core team.
I know we never know the real side of US Presidents (everyone liked Bush's speeches during his presidential campaigns) until they are ones, but Barack Obama surely the best one to lead US.

p/s below is the short introduction about him I copied from Wiki.

Barack Hussein Obama, Jr. (born August 4, 1961) is the junior United States Senator from Illinois and the presumptive nominee of the Democratic Party in the 2008 presidential election. He is the first African American to be the presumptive presidential nominee of any major American political party.

"Since announcing his presidential campaign in February 2007, Obama has emphasized ending the Iraq war, increasing energy independence, decreasing the influence of lobbyists, and providing universal health care as top national priorities."


A graduate of Columbia University and Harvard Law School, Obama worked as a community organizer, university professor, political activist, and lawyer before serving in the Illinois Senate from 1997 to 2004. Following an unsuccessful bid for a seat in the U.S. House of Representatives in 2000, he announced his campaign for the U.S. Senate in January 2003. After winning a landslide primary victory in March 2004, Obama delivered the keynote address at the Democratic National Convention in July 2004. He was elected to the U.S. Senate in November 2004 with 70% of the vote.

As a member of the Democratic minority in the 109th Congress, he cosponsored legislation to control conventional weapons and to promote greater public accountability in the use of federal funds. He also made official trips to Eastern Europe, the Middle East, and Africa. In the current 110th Congress, he has sponsored legislation regarding lobbying and electoral fraud, climate change, nuclear terrorism, and care for returned U.S. military personnel. Since announcing his presidential campaign in February 2007, Obama has emphasized ending the Iraq war, increasing energy independence, decreasing the influence of lobbyists, and providing universal health care as top national priorities.

For complete article, click here.

Oil Price: Abstract from and explanation to chedet.com (with a brief introduction to it)

First come first, chedet.com is none other than the blog published and self-written by arguably the Malaysian's best leader ever, Tun Mahathir Mohamad himself. Hailed as 'the architect of the modern Malaysian economy' by BBC, he is indeed a humble economic prudent thinker, who are now RM15k/month remunerated Petronas adviser and also the adviser of Proton, Langkawi Development Authority (Lada) and Tioman Island Development Authority.

Now, although, retired and already passed 80 of age, he is still very much active in both national and global political arena. He could well be the single most important factor predisposing to BN calamitous defeat in the previous march National Election. Currently, the blog talk about domestic issues like Judiciary, UMNO (most of his articles about) and especially on the fragility of current government policies.

Undeniably, he's not the perfect leader, especially with the Wikipedia claim that he actually did more damages to Malaysia both politically and economically than he did to improve them, but for certain, he's the one who shaped Malaysia into what we have seen today, being among the finest of the developing countries.

Getting to the point, this article is to explain the Oil Price article published in chedet.com which came out right after the increment of the petrol price from RM1.92 to RM2.70 (78 cents increase) and diesel from RM1.58 to RM2.58 (RM1 increase). The increase came as a shock to us Malaysia amid PM's initial statement saying the increment will take place in August. Not enough with the bad timing, percentage of increase is staggering 40% for petrol and 60% for diesel.

Simple conversion to daily petrol expense:
RM 50 petrol = 26.04167 Liter before petrol price increase

RM 50 petrol = 18.5185 Liter after petrol price increase

It is true, compare to the oil price of UK (about RM6.3) and US (about RM5), we enjoy better amount of subsidy (plus the yearly rebate of RM625). However, if analyze it deeper, the result is rather the opposite, we are facing more increase in percentage compare with the 2 countries (this however may due to the fact that we hold on to the old price 1 year too long). From economic point of view, we suffer even more as our Purchasing Power Parity (PPP) is actually way lower than the US and UK. It simply means the American can afford better to pay RM5 for the petrol than we do for RM2.70. Our Per Capita Income is also only 1/3 of theirs, now it means, roughly every US citizen has thrice the money we have to pay the petrol. Going deeper and cruder, it's like comparing RM2.70 divided by 1 and RM5 divided by 3 (RM1.67). This however, portray the very crude math calculation and of course subject to my limitation in Economic.

What interest me the most however is the 1 concerning the Floating of Ringgit. Floating is the type currency exchange regime by which a government let their currency follow the global market as our currency now. For better understanding, compare the regime with Fixed Currency with which Malaysia adopted to elude the Asian Economic Crisis and highly regarded by the IMF and World Bank as being successful. It is now being referred by USA itself.

True that our Ringgit has been steadily rising. In accordance to the Tun's blog, we hit an 80 cents or 20% increase from RM3.80 for USD 1 (durind Fixed or Pegging period) to impressive RM3.08 (though, I see RM3.20 in publications). Roughly, it means that we are stronger financially to BUY products from other countries. Nonetheless, in a deeper economic sense, it is rather unfavorable. Simply put, what is the good of having 20% stronger currency if the price of imported goods show a higher increment? Worse come to worst, this also means our export price also go up in relation with the higher ringgit price. Definitely, we are highly dependent country. This means we need to sell our products to buy others. We are not really self-sufficient like UK and China e.g., we need the Thais to provide us with the rice and Japanese with the electronic.
We are, like the US. If other countries should fail, we would too. If other countries reduce the no of import from our shores, this could mean we have little money flowing in.

The last matter I will discuss is concerning our oil export. According to the Petronas adviser, we are actually producing 650'000 barrel of crude oil per day and consume 400'000 of them leaving 250'000 for exportation purpose. The oil recently hit the record USD139 (oil price is fixed to USD) per barrel, ergo, the revenue that could be generated by government is as below:

Note: 3 years back, the price of global oil is USD30, now, USD139. The USD109 increment is almost purely product-based with minimal production cost involvement. Henceforth,

Annual national return: USD109 x 250'000barrels x 365days x RM3.08

That amounts to roughly RM30bil but Petronas actually generates around RM70bil annually from other sectors. That the essential reason behind the Petronas never-ending fund of reviving other collapsing nation-owned company like MAS and Proton.

Now, the government is pondering over becoming a full oil-importer country. This way, we could generate more cash buying other countries cheaper oil while selling our high-quality oil with higher price.

Recently, government has announce there won't be any more increment until next march even though the oil price hit the expected USD200 per barrel. I included the article (above) from paultan.org regarding the government strategy to curb the rapid rise of the oil price.

I need to emphasize this is not my opinion, rather an extension and explanation to Tun Mahathir's article. My best wish is to see our beloved country circumvent and break out of the current oil crisis. Malaysia Boleh!


Full article from chedet.com on the oil price could be reached here

A Beautifully Crafted Song: Young Folks (with clip)

I really love this work. It is simple yet blissful. Its the song by swedish indie rock band known by the name of 'Peter Bjorn and John', the first name of each member of the band: Peter Morén (vocals, guitar and harmonica), Björn Yttling (bass guitar, keyboards and vocals) and John Eriksson (drums, percussion and vocals).


Young Folks was actually their single in 2006 which was New Musical Express 2nd best track of the year 2006. Its currently a featured song in the movie '21'.


The song would capture the listeners not just by the melody but also with the easy going lyrics as the title of the song implies. I especially love the video clips.
It is made based on classical cartoon layout.


The song sounded like Jamaican, Brazilian Samba with a bit taste of the Beatles. The rhythm is so very catchy.
Give it a shot, you'll fall for it.




if i told you things i did before
told you how i used to be
would you go along with someone like me
if you knew my story word for word
had all of my history
would you go along with someone like me

i did before and had my share
it didn't lead nowhere
i would go along with someone like you
it doesn't matter what you did
who you were hanging with
we could stick around and see this night through

and we don't care about the young folks
talkin' bout the young style
and we don't care about the old folks
talkin' 'bout the old style too
and we don't care about our own folks
talkin' 'bout our own stuff
all we care about is talking
talking only me and you

usually when things has gone this far
people tend to disappear
no one would surprise me unless you do

i can tell there's something goin' on
hours seem to disappear
everyone is leaving i'm still with you

it doesn't matter what we do
where we are going to
we can stick around and see this night through

and we don't care about the young folks
talkin' bout the young style
and we don't care about the old folks
talkin' 'bout the old style too
and we don't care about our own folks
talkin' 'bout our own stuff
all we care about is talking
talking only me and you

and we don't care about the young folks
talkin' bout the young style
and we don't care about the old folks
talkin' 'bout the old style too
and we don't care about our own folks
talkin' 'bout our own stuff
all we care about is talking
talking only me and you
(repeat)
talking only me and you

talking only me and you
talking only me and you