New Straits Times, Malaysia - 4 hours ago
By : SANTHA OORJITHAM
Malaysian consumers have many unanswered questions about fuel subsidies. It's time to explain how pump prices are set, experts tell SANTHA OORJITHAM.
"MALAYSIA is exporting crude oil. If the oil price goes up, don't our exports earn more and can't that subsidise pump prices?" asks a college professor in Kuala Lumpur.Saudi Arabia is lowering oil prices, claimed DAP's Teratai state assemblywoman Jenice Lee after a protest earlier this month. "How come we are not able to do it?"Many don't understand how the Automatic Pricing Mechanism for petrol works and why petrol and diesel prices rose 41 per cent earlier this month.While economists agree that the pump price had to be raised, they note that the public was not adequately prepared for the hike - even though petrol prices have risen steadily since 2000 and subsidies have been adjusted yearly since they were introduced in 2004 for petrol and 2000 for diesel (see chart).
Yes, we export crude petroleum, says the president and chief executive officer of Petronas, Tan Sri Hassan Marican. In 2007, Malaysia extracted about 600,000 barrels per day, of which 339,000 barrels per day were refined here. The remainder was exported unprocessed, making us a net exporter of crude.
On the other hand, notes Minister for Domestic Trade and Consumer Affairs Datuk Shahrir Samad, Malaysia is a net importer of refined petrol. ... click for more: Opinion: On managing and allocating subsidiesNew Straits Times, Malaysia
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