Tuesday, January 15, 2008

Lulu Always Wondered About Our Oil Production and Consumption

Lulu was going to do a lulu entry on this, but Lulu thinks Don Rahim of Promuda has done an excellent job on this.
So that you do not compare Don Rahim's wisdom with that of Lulu's, Don's piece is in blue.
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The DPM said that the opposition's promises to reduce oil prices will only bankrupt the country. See article below.
How true is that statement? Let's find out.

The following is the amount of total subsidies paid by the Government every year. Data taken from
http://www.bnm.gov.my/files/publication/msb/2007/11/pdf/6.3.pdf

Notice that the total subsidies have increased 2.75 times since 2002.

But bear in mind that the data above did not specify that it's only for petroleum subsidies. This means that other subsidies are also included in those figures.

Next, let's find out how much is the Govt's revenue from petroluem taxes & duties, dividend from Petronas and gas & petroleum royalties. Data below taken from
http://www.treasury.gov.my/view.php?ch=24&pg=183&ac=1443&fname=attachment&dbIndex=0
Notice that total revenues have increased 2.94 times since 2002.

Next, let's compare the above tables and find out the net figures for each year to see if the Govt is better off or worse off from the increase in global oil prices.
WoW! The net figure has increased almost 3 times since 2002!

Means that the Govt benefitted from the increase in global oil prices. It was a RM35bil windfall in 2006! And even after deducting the RM10.1bil subsidies for that year!

Means that there is actually some leeway to reduce oil prices without bankrupting the country by using that 'windfall', if we were to look at the situation from this perspective.

Any idea where that 'windfall' every year is being utilised for? Is it being saved for the future, used to pay our debts or utilised for development purposes? In other chapters, we'll explore that.

Regards,
Don

http://groups.yahoo.com/group/promuda_circle/message/15635
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still think the fuel subsidy is unsustainable?
still think our country will go bankrupt?
or, in a more lulu manner of thinking, do you think the government celebrates or frets when the price of oil goes up?

10 comments:

Anonymous said...

Let's face the ugly truth: The Big Ears ceo is more interested in wasting petroleum profits in useless endeavours such as '2nd angkasawan proram' than in subsidies to reduce the plight of the poor

Anonymous said...

But but but.........didn't Najis (oops Najib) said Malaysia will become a crude oil net importing country by 2011 ?

shag said...

LOL brilliant sleuthing by Promuda given the paucity of information.

However, the situation isn't as clear cut as this. The "Money In" doesn;t tell us Petronas' profits as the whole group's accounts are not publicly available. The amount of net oil profits gained by petronas could be even more than the what is reported in these figures.

Sharing said...

Thanks LuLu to provide the answers that Rakyats are in a mist to find
A mist that was casted by our "wonderful" DPM!

If they did not see those reports,
how can they make the budget for every years?
Amazing or co-incident?

For Budget 2008, it was proposed at 176.9 billion.
The oil income from 2006 (45billion), is already a quarter off!!
2007 should be more!!
Where are those 176.9 coming from?
But they are pressing for License fee in almost every walk of life!!

With non-transparency and lack of accountability and responsibility, we are only answered with lip-services, manipulation and abuses!

Another reason they should be VOTED OUT!!

denzook said...

don understand, the dividend and royalties are tricky, i don think petronas is 100% owned and even it is, it is via khazanah and khazanah money is khazanah's. and royalties are for states, not federal. so the gov can only use tax+duties collection for the subsidy.....

Sharing said...

But then where should royalties gone in those States?
And, which States?

Sharing said...

From Miniature to the State!
=============================
This reminds me what happens in a Housing Project with much similarity to compare!

A Housing project with Townhouse and Condo
in the name of Condominium project promised with club, Management Corporation and a Town Park to come!
Naturally under HDA, STA, TCPA, NLC and others in force!!
with Land Offices, City Council, State Planning, State Land and others providing approvals,
involving Officers, Professionals, Politician (councilors) and ordinary People taking a part.

With the manipulations of Laws and Regulations with abuses to the approval as well as transparency and accountability and the high-handed monitoring authorities,
the incoming are wildly spent, common properties and facilities into private hands, paying for services not maintained!

An income of more than 1.5 millions with only lifts, cleansing and security to maintain,
the accounts many had queried but unanswerable!
The Club with millions of income are in private hand!
Same as oil income going nowhere!

Only a few need to represent
so they rule the project as they were kings!

Are they similar to what happened in the Politics!

The Project has involved Lawyers and Courts!
Why it cannot be worked?
The income and expenses have much space to keep voices in control!!

How come the basis Mandamus to compel parties to follow approval can be withdrawn?
How come a Judge compel no party to provide Development order to judge
and to pay maintenance Charge when facilities and MC had nowhere to be found?
http://www.hba.org.my/laws/CourtCases/1996/emko_properties.htm

If People are numb towards their Daily Life, can they be expected to change the Country as large??

A senior lawyer of more than 30 years can maintain silence for 13 reminders!!
And, the judge told the client to work instead!!
Can any civil grievance be addressed?

Sophie said...

lulu, i like your blog. got serious stuff and satire. check out my little piece of satire. cheers

http://sophiesworld-sophiesworld.blogspot.com/2008/01/malaysia-singapore-in-new-cockfight.html

Pearls said...

Aiyahhh... this oil and its subsidy story is a very complicated one la. Its not as easy as what LULU has shown, although I must say it is very convincing.

We all gotta admit that this oil price fountaining to the sky is a worldwide headache. If so, why should Malaysia be spared? Is it just because we have some oil production? We have to get real here lo.... What we produced may not be enough for our consumption and therefore there is a need to buy. Buy here, pay loyalty to state government there, pay research, pay this and that.... where got balance a lot more to subsidize so much?? Aiyah...

My advise is this.. as long as oil prices keep going up and we have no choice but to face up to reality that we have to pay more. Be realistic!

ummi sa'eed said...

Just ran into your blog. Have some comments:

1. Subsidy numbers are only from government, PETRONAS subsidizes oil and gas also...especially gas. And if your read the article, O&G subsidy is climbing to 40 Billion. Which is about 30 billion off from what BNM reported. I guess the extra 30 billion is what PETRONAS is subsidizing.
2. Maybe petrol should be at market price and get tax relief. From our salary brackets, then if they are smart enough, they can figure out how much relief to give...but then again, income lower than 2500 won't have to file taxes...hmmmm
3. Agree with idea to lose taxes on vehicles.
4. The bigger picture is supply sustainability and energy security...not really monetary.