Retail price of petrol coming down tonight?

I received a phone call of a friend in one of the major oil companies, “You didn’t hear this from me, BUT don’t buy petrol TONIGHT!”

Why?

Is the retail price of petrol coming down at midnight?

*Updated 930pm

It has been announced. RON 97 and diesel is now retailed at RM 2.55 and RM 2.50 respectively. It may not been reduced as calculated  by BigDogDotCom two days ago, to RM 2.35. Never the less, any reduction is a step to something positive for the rakyat.

Bernama.com has the report:

Petrol And Diesel Price To Drop Saturday

By: Ramjit

PUTRAJAYA, Aug 22 (Bernama) — The petrol and diesel price will drop by between eight sen and 22 sen respectively Saturday.

Prime Minister Datuk Seri Abdullah Ahmad Badawi announced Friday that the Cabinet had decided that the price of RON97 petrol be reduced by 15 sen to RM2.55 a litre from RM2.70, while RON92 would cost 22 sen less at RM2.40 a litre from RM2.62 a litre.

The retail price of diesel would drop by eight sen to RM2.50 a litre, he said in a statement.

The petrol price was determined by taking into account the actual price from Aug 1 to 21 and the 30 sen per litre subsidy borne by the government while the subsidy for diesel, based on the new price, was 50 sen a litre.

“The cabinet today decided to bring forward the enforcement date for adjustment of the new petrol price,” he said.

Abdullah said the decision was made after taking into account the fall in the world fuel price in recent weeks and the steep rise in the inflation rate last month.

The Consumer Price Index (CPI) for last month, as announced today, rose by 8.5 per cent compared with July last year.

“It is the government’s hope that the reduction in the petrol and diesel price will help ease the burden of consumers and reduce the inflationary pressure, especially on the low- and middle-income earners. The decision is also based on the current economic development,” the prime minister said.

On Aug 1, the government announced that the petrol retail price till the end of the year would be adjusted on the first of every month, with the subsidy maintained at 30 sent per litre.

However, the prime minister said the adjustment formula would only be implemented if the retail price of petrol was less than RM2.70 per litre. Otherwise the price would be capped at that.

On June 5, the government raised the petrol price by 78 sen or 41 per cent from RM1.92 to RM2.70 a litre and diesel by RM1 or 63 per cent from RM1.58 to RM2.58 a litre.

At that time the world oil price was US$125 a barrel and it continued to rise to hover at US$140 a barrel at one time but has been on a downward trend since early this month.

The price was around US$115 a barrel last week and US$121 a barrel yesterday.

With today’s announcement, the drop in price of RON97 petrol was 5.5 per cent, RON92 (8.4 per cent) and diesel (3.1 per cent).

— BERNAMA

Published in: on August 22, 2008 at 19:09  Comments (2)  

The URI to TrackBack this entry is: https://bigdogdotcom.wordpress.com/2008/08/22/retail-price-of-petrol-coming-down-tonight/trackback/

RSS feed for comments on this post.

2 CommentsLeave a comment

  1. Asian Sentinel is not a news-blog-page that catches the eye too often.

    But this shokku is worth the risk of read-it and weep:

    Just another Oil Shokku
    Tag it:Todd Crowell
    22 August 2008
    It is widely assumed that Japan is better prepared than the rest of the developed world to accommodate rising crude oil prices. After all, didn’t Japan wean itself away from imported petroleum following the first and second of the big oil shocks (or, as the Japanese say, “shokku”) in 1973 and 1980? Hasn’t oil consumption fallen steadily from its peak in 1996 even as gross domestic product has continued to rise?

    All true, but in some ways it is irrelevant, as Japan remains dependent on imports for 80 percent of its energy needs and thus cannot avoid the consequences of US$100-plus petroleum prices, a fact now being reflected in its slowing economy. And Japan’s experience carries an ominous warning for other nations, like the United States, that are years behind it in seeking so-called energy independence.. Japan, for instance, has turned to nuclear power with a vengeance, with 55 reactors providing 30 percent of its electricity. That is expected to increase to at least 40 percent over the next 10 years, according to the World Nuclear Association. But despite Japan’s attempts to turn away from imported energy, it remains largely hostage to the supertanker.

    Unlike earlier energy crises, not many in Japan today speak of an oil shock or even an oil shokku. Instead they do what they can to ameliorate the impact of the slow, grinding consequences of rising crude prices (coupled with rising food prices) which impacts almost everyone here.

    In the first five months of 2008, Japan spent 5 percent of its GDP to pay for crude oil and other petroleum products, such as natural gas, compared with 2.1 percent in 2004. By comparison, the U.S. spent 4.8 percent of its GDP on imports, but these include manufactured goods from China and elsewhere, not just petroleum imports.

    Throughout August the government issued a steady stream of gloomy economic assessments. On August 7, the cabinet reported that the period of growth that had begun in early 2002, the longest post-war expansion, had ended and Japan was on the verge of a recession. The following week the government said that the economy had contracted at an annualized 2.4 percent in the second quarter.

    On August 20 the Bank of Japan described growth as “sluggish,” using that word for the first time in 10 years. The previous month it had said that the economy showed signs of “further slowing down”. All three reports blamed rising oil prices and declining exports as the reason for the slowdown.

    “I will firmly take emergency measures for people who are seriously affected by abnormal oil prices,” declared Prime Minister Yasuo Fukuda in a statement released shortly after he reshuffled his cabinet, bringing more of the ruling party’s senior leaders into the government. Talk of a supplemental budget to stimulate the economy is in; thoughts of balancing the budget are out

    In mid July the operators of 200,000 fishing vessels, each one a prodigious user of fuel oil, held a one-day strike to protest rising fuel costs. The month before the squid boat operators had held a two-day stoppage, which caused a spike in squid prices.

    In Japan fish prices are not something to be trifled with, and the government promptly announced a 75 billion yen (about $7.5 billion) subsidy program for fishermen. Much of it is earmarked for outright purchases of fish and low interest loans, but 8 billion yen will go directly to fishermen who cannot recover their fuel costs from fish sales.

    The Asahi Shimbun newspaper noted that if every fisherman used the fund, it would exhaust the 8 billion yen fairly quickly. It also flew in the face of the G-8 energy minister meeting in June in Japan preparatory to the G-8 summit a month later. The delegates had specifically denounced the widespread Asian practice of subsidizing petroleum prices.

    Other signposts of an economy struggling to adjust:

    Gasoline prices hit 185 yen ($1.65) per liter at most gas stations in the Tokyo area in August. Prestige Omni Service Station in Ota Ward reported a 15 percent decline in sales from May, partly reflecting the reinstatement of the 25 yen gasoline tax that had been briefly suspended due to a political impasse and rising wholesale prices.

    Nippon Rent-a-Car, one of the capital’s largest such establishments, introduced 400 hybrid cars into its rental fleet by April and was planning to double the number for 800 by the end of July to meet the growing demand for the fuel efficient cars.

    Japan Airlines, constantly looking for ways to reduce cut fuel bills, instructed its pilots to throttle back to almost a glide path while descending to land at San Francisco Airport (the new procedure apparently would not work at busier airports), saving an estimated 2,500 to 3,000 liters of aviation fuel for each trans-Pacific flight.

    Traffic on Tokyo’s notoriously crowded expressways has lightened noticeably. An official at the Metropolitan Police Traffic Control Center said, “Our congestion warning signs, which used to be in the red all the time, have not been red for the past several months.”

    Owners of public bath houses are hastening to switch from heavy oil to natural gas to feed the furnaces that keep their bath water warm. “We have no other choice to survive,” said one bath house owner.

    Nippon Oil, Japan’s largest refiner with seven plants in the country, said that the volume of gasoline that it shipped declined 20 percent in July from the previous July, yet profits increase by 11 percent for the second quarter.

    It is true that some industries in Japan, such as steel, have made huge strides in energy efficiency and that the country as a whole has become less dependent on imported oil, allowing the Ministry of Economy and Industry to boast that overall energy efficiency is three times higher than the rest of the developed world.

    But to a large extent Japan has not reduced its energy dependence so much as it has simply substituted other sources of energy for oil. In 2006 Japan generated 1073 billion kWh gross, 28% from coal, 23% from gas and 9% from hydro. Per capita consumption is about 7700 kWh/yr, compared to about 12,000 kWh/yr for the United States. Hence, it is still utterly dependent on imports for most of its energy and thus vulnerable to the vagaries of world energy prices.

    (China may have to slow her economics chu-chu train after the Beijing Olympics some to prevent it from over heating.)

  2. Biggum,

    So what is Abdullah – he has flipped – flop on this:

    China’s petrol buying spree poised to end
    By Kathrin Hille in Taipei

    Published: August 24 2008 20:21 | Last updated: August 24 2008 20:21

    China’s state-owned oil companies are likely to stop imports of refined products such as diesel and petrol next month after a nine-month buying spree that has left stockpiles overflowing, one of Asia’s largest refiners said.

    “Since China started whipping up imports in November last year, 25 per cent to a third of our diesel exports have gone there,” said Wilfred Wang, chairman of Taiwan’s Formosa Petrochemical (FPCC). “But this market will disappear next month.”

    His remarks confirmed market expectations of an imminent end to a buying binge from Sinopec and Petro­China that has supported refining margins in the region but has been suspected of being out of line with end demand.

    Since late last year, the two Chinese state-owned refiners had been importing increasing amounts of diesel, peaking at 960,000 tonnes in June, and the country be­came a net petrol importer for the first time in May.

    Industry experts have attributed the buying binge to political orders to refiners to avoid shortages during the Olympics. The import wave had been boosted by tax rebates granted to Sinopec and PetroChina for imports of refined products.

    However, much of the imported petrol and diesel has been stockpiled rather than consumed.

    “The state refiners’ stockpiles are so full that they have been reselling the stuff,” FPCC said.

    Mr Wang said this was one of many non-economic factors in the oil price.

    The end of China’s import boom, along with additional capacity from India’s Reliance later this year, is expected to exacerbate a drop in refining margins across Asia.

    The benchmark Singapore refining margin reached an average $9.92 per barrel in the first half of this year, 20 per cent above last year’s, partly driven by the Chinese buying, but the full-year average margin would slide back to last year’s level, the FPCC said. That would mean the Singapore refining margin could drop well below $6 per barrel in the second half.

    “The highs in the refining margin are higher than last year’s, but the lows will be lower,” Mr Wang said.

    Copyright The Financial Times Limited 2008


Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Google photo

You are commenting using your Google account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s

%d bloggers like this: