Stupid Malaysian Economics

https://www.theedgemarkets.com/article/ringgit-weakness-unique-inflation-rgm-laments-it-deciphers-rising-consumer-prices

There are so many stupid comments by this person, allowed by the editor of this news portal. My comments are italised.

PETALING JAYA (May 18): Retail Group Malaysia (RGM) managing director Tan Hai Hsin said on Wednesday (May 18) there is no direct answer on the impact of the ringgit weakening against the US dollar because the current inflation scenario is “unique” at a time when rising consumer prices are due to the increase in raw material, import and transportation costs.

Raw materials and others increase in price because demand exceeds supply. These indirectly increases prices of products. But evidences from all retail products indicated that demand exceed supplies in all things that I am interested in, cars and electronics. 

“The problem today is not just happening in Malaysia, but also in Singapore, Taiwan, Thailand, [the] United States, Europe, and around the world. How can we stop inflation? 

Because US suffers from inflation so nations that peg currencies to the US also suffer inflation. Try pegging the currency to gold or better still to oil, then there will be no inflation.

"At this moment, no country in the world is able to control the rise of inflation. 

Because these countries are not interested to stop inflation which they can do by pegging their currencies to raw materials such as gold, but they are not interested. It is more profitable to the rich to steal from the poor by devaluing currencies and thus robbing from savers and workers, as well as local resources such as water.

“Traditionally, prices went up because of demand, but prices now do not go up because of demand. It is because of the cost increase from raw materials, import and transportation costs. That is very unique,” Tan laments as he fielded reporters’ questions at RGM’s briefing here on the rejuvenation of Malaysia's retail sector post Covid-19 pandemic.

Elaborating on RGM’s view that the current rise in consumer prices is not demand-led, he said RGM, which conducts research on the Malaysian retail sector, does not perceive the current rise in the country’s retail sales as due to revenge spending post pandemic because consumers are returning to their normal spending patterns.

Show your data and we can prove they are all wrong. Malaysia had already started normal spending even during the peak of the pandemic with stores open even with known sick workers. Only after so many of these idiots died then strict checking were carried out but spending was normal, even dine in. Of course many customers were not stupid to risk their lives during the peak of the pandemic so there appeared to the perception of abnormal spending, but online purchased were still carried out. Even now, we are still in restictions, so technically not back to normal spending.

According to him, RGM defines the phrase revenge spending as "buying everything you have not bought in the past". 

“Media has said that it is revenge spending, but we have to define revenge spending, which is buying everything you have not bought in the past. We are not experiencing [the situation] that way, people are back to normal spending. 

When you are so stupid in not knowing to do the analysis, of course you do not see any revenge spending even if they are right in front of you. With so many high spenders dead, the older people, total spending therefore suffer. Production capacities are still limited because physical distancing is still carried out.

“For example, in the food and beverage line, eating has its capacity and you cannot make up for what you have missed previously. 

This idiot must think that people eat luxury food every meal time.

“And for the retail side, if you have missed [purchasing gifts] for the past two Christmases, will you buy three [gifts] at once?” Tan said.

Most people will buy more gifts either in number or value, simply because they have more money, except this stingy idiotic Tan.

At the time of writing on Wednesday, the ringgit weakened to 4.3955 against the US dollar as the greenback strengthened in anticipation of US interest rate hikes to fight inflation.

The exchange rate was between 4.3850 and 4.3955 so far on Wednesday. 

Over the last one year, the ringgit was traded at between 4.1070 and 4.3987 against the US dollar.

Last Friday, Bank Negara Malaysia (BNM) said in a statement in conjunction with the central bank’s announcement on Malaysia’s economic performance for the first quarter of 2022 that for 2022, in an environment of high input costs and improving demand, the country’s headline inflation as measured by the consumer price index is projected to average between 2.2% and 3.2%. 

It does not take into account the devaluing of the RM of 10%. The impact is not immediate but sooner or later, it will catch up on total inflation.

"Underlying inflation, as measured by core inflation, is also expected to trend higher during the year, averaging between 2% [and] 3%. Several key factors are expected to partly contain upward pressure on prices, namely the existing price control measures and the continued spare capacity in the economy. 

"Nonetheless, the inflation outlook remains subject to commodity price developments, arising mainly from the military conflict in Ukraine and prolonged supply-related disruptions. The outlook is also contingent on domestic policy measures on administered prices,” BNM said.

Globally, major economies such as the UK and the US have reported substantial inflation compared with a year earlier.

CNBC, quoting the UK's Office for National Statistics, reported on Wednesday (May 18) that the UK's inflation soared to a 40-year high of 9% in April 2022 from a year earlier as food and energy prices spiralled.

Because of revenge spending. Despite the shift to more ecofriendly practises, the shift is not sufficient to overcome revenge spending, so it appeared like normal spending.

"The 9% rise in the consumer price index is the highest since records began in their current form in 1989, outstripping the 8.4% annual rise posted in March 1992 and well ahead of the 7% seen in March of this year (2022)," CNBC reported.

On May 11, 2022, it was reported that the US' consumer prices grew 8.3% year-on-year (y-o-y) in April 2022 compared with the 8.5% y-o-y rise in March 2022.

"Consumer prices jumped 8.3% last month (April 2022) from 12 months earlier, the US Department of Labor said on Wednesday (May 11, 2022). That was below the 8.5% y-o-y surge in March [2022], which was the highest rate since 1981," AP reported.

At the RGM press conference on Wednesday (May 18, 2022), Tan said the weaker ringgit against the US dollar has not affected the rate of consumer spending yet.

"Retailers are enjoying better sales. Some retailers even have better sales than before the Covid-19 pandemic [which began in early 2020].

"The trend says it is good now. My only concern is how long will it last?" he said.

According to RGM's March 2022 report on the Malaysian retail sector, RGM had revised upward its 2022 Malaysia retail sales growth forecast to 6.3% from the 6% growth projection made in November 2021.

These type of people were responsible for the reckless Covid policies in the early days that led to unnecessary deaths and sufferings of their most valued customers and workers. Fortunately, mass vaccinations saved Malaysia.

Zero Covid in China and Taiwan may not be wise against Omicron, but they are proven to save lives while allowing full daily activities without any restrictions for a much longer time. Unfortunately, they had ignored mass vaccinations, which had caused more hardships during the true full lockdown, unlike the Malaysian fake lockdown.

At least, revenge spending will still be possible in China and visible because there are less deaths. Malaysians still want to deny universal economics of demand and supply.

Malaysia's retail industry sales contracted 16.3% and 2.3% in 2020 and 2021, respectively, according to RGM.

Chong Jin Hun

Deflationary Economics

Lebih kepada kawasan di Afrika tapi Malaysia pun dalam bahaya. Puncanya pakar ekonomi rasuah. Pentingkan 9rang kaya dari yang miskin, iaitu subsidi.

Contohnya, minyak. Harga petroleum sudah naik lebih 3 kali, tapi harga petrol di Malaysia, macam masih sama saja. Baru aku balik ka Sandakan. Ertinya subsidi.

Jimat juga aku tapi ini menghancurkan ekonomi negara. Lebih baik duit subsidi di beri kepada semua rakyat seperti zaman Abdullah Badawi. Di bantah oleh orang kaya terutama sekali orang China. Mereka yang paling ramai memakai kereta mewah.

Sepatutnya menggalakkan micromobility untuk jimat wang petrol tapi terbalik pula, haramkan micromobility. Palui betul.

Hasilnya, matawang sudah jatuh, ertinya inflasi teruk. Konon, buang subsidi akan tambah inflasi, baru aku baca article dari pakar ekonomi rasuah. Pakar ekonomi jujur tidak akan membenarkan subsidi untuk mengawal inflasi, dan sudah terbukti banyak kali sudah. Kalau engkar, jadilah macam Sri Lanka, Venezuela dan Zimbabwe. Penyelesaian nya senang saja, buang wang tempatan, pakai wang asing.

Aku perhatikan, sudah habis minyak masak subsidi. Yang masih banyak, minyak makan impot. Ini sudah simptom Sri Lanka. Duit ada, barang tiada. Sama lad di Venezuela.

Berbaris berhari hari untuk dapatkan subsidi bahan makan, tapi orang tidak mahu tanam makanan sendiri, sebab barang subsidi lagi murah. Yang pelik nya, rakyat marah kerajaan kerana tidak bekal kan makanan, tapi diri sendiri tidak mahu tanam. Walaupun ubi kayu.

Bukan tiada makanan, tapi perlu bayar harga sebenar dipasaran dunia. Jadi, pekerja dan peniaga mula mencaj pakai matawang US. Sama lah dengan Pakistan rupanya.

Saya sudah terangkan cara mengatasi kenaikan harga kelapa sawit tapi itu sikit saja berbanding petrol yang sampai 300% sudah. Boleh kan atasi inflasi tanpa subsidi? Bolehkah kalau jujur dan pentingkan rakyat.

Taktik deflation ekonomi. Rakyat untung betul. 300% kali untung tapi harga petrol masih rm2 se litre. Tapi rm2 ini bernilai 1us = rm1.5, iaitu kenaikan nilai matawang rm 300%.

Malaysia mampu sebab is pengeluar petrol dan gas, tapi kesan nya besar, tapi merugikan tycoon dan orang kaya sekarang sebab itu di tolak mentah mentah.

Apa tidak, rumah akan turun nilai. Barang ekspot menjadi mahal termasuk pelancungan, sebab pelancung terpaksa bayar 3 kali ganda lebih. Konon kurang lah pelancung, tapi ini langsung tiada bukti, dan terbukti pula langsung salah di Singapura. Pelancungan Singapura lagi maju dari Malaysia, sebab nilai tinggi. Begitu juga Jepun.

Dengan kenaikan nilai RM, harga impot dan harga bunga hutang menjadi amat rendah, kurang 300%, dalam RM lah, sebab banyak hutang luar negara pakai US.

Sebab barang impot jadi murah, dalam RM lah, peralatan semua naik taraf. Hotel pun semua naik bintang dan menjadi bersih dan canggih, sebab spare part murah. Pekerja pun jadi mahir, sebab ramai dari luar negara sanggup kerja di Malaysia, bukan macam sekarang. Pekerja buruh kasar sahaja mahu kerja. Yang jadi mahir, semua lari ka Singapura.

Kos nya tinggi. Habis foreign reserve Malaysia dan pembangunan bangunan tidak boleh di buat. Habis duit negara bayar gaji pekerja dan beri wang tambahan kepada penyimpan duit RM secara tunai.

Yang rugi, yang banyak hutang. Nilai hutang di dalam negara bertambah. Nilai emas turun. Nilai kereta turun. 2nd hand lagi lah turun. Dulu beli rm60,000, sekarang jadi rm20,000 dalam sekelip mata.

Sebab itu amat membebankan ramai orang kalau nilai RM naik mendadak. Tapi yang merana, cuma orang yang suka spekulatif. Beli dan jual. Kalau kita beli untuk guna, apa rugi nya? Kereta masih boleh pakai.

Yang jujur tidak akan rugi. Yang rasuah dan penipu yang akan rugi, kalau nilai RM naik, walaupun mendadak.

Saya jujur konon tapi berhutang 9 tahun beli kereta. Rugi banyak lah kalau harga barang jatuh 300%. Sebenarnya, sesiapa yang berhutang untuk membeli barang, kurang jujur sebab belanja lebih dari kemampuan. Kalau pun konon mampu sebab gaji besar, masih tidak boleh kata mampu sebab boleh hilang kerja. 

Termasuk aku lah, tapi aku buat ini sebab ekonomi Malaysia, ekonomi inflasi. Kita rugi kalau tidak berhutang.

https://youtu.be/CdrLp0lKjHc

Giving choices for people: subsidy or cash!

I had tried to explain to Malaysians that subsidy is bad for the economy but they disagree. Their main argument is that they prefer subsidy compared to cash or BR1M. My old time friend, a retiree, want to have both. That is why I got the idea of letting people choose the type of cash incentives that citizens get.

The greatest problem with subsidy is that, foreigners also benefit from fuel subsidy, or for that matter, all form of subsidy. The best way to solve the problem was to issue coupons or in the case of fuel, all those who are given special smart cards so that we can control how much subsidy.

My friend told me that food coupons, widely used in USA and many advanced countries are too expensive to implement in Malaysia. He mentioned about the difficulty of implementing food coupons for Nestle, the biggest retailer for food products in Malaysia, if not the world.

The greatest source of excess sugar or carbohydrate is also Milo, with up to 50% sugar content, actually carbohydrate. Carbohydrate and sugar are the same. They have the same impact on diabetes and other ills caused by overeating. My friend has suffered from diabetes, so severe that he lost both kidneys and had to rely on free government medical treatment.

One major objection to cash handout in lieu of fuel subsidy was the about of the cash as implemented during Abdullah Badawi's time. I like it very much, but it was a case of too little and too late.

One major problem is that, the amount of fuel subsidy, which was RM500 was still too low to cover fuel costs. So, let us increase to RM1000, or the average cost of subsidy used for petrol for the middle income users. If they want more, why not? My total petrol cost at current prices is RM200 per month, driving a Proton Exora with a fuel consumption of 11 liter per 100 km. I travel 40 km per day to my office from KKIA to UMS.

Let us say that the government wants to subsidise 50% of the fuel cost. That means I should be getting a fuel cost of RM1,200 per year. So the cost to the government is RM1,200 for a fuel hungry car, travelling for long distances to his or her office.

Another problem with Abdullah Badawi's cash in lie of subsidy was that, only those with cars are given subsidies, so those who travel by taxi or buses are not covered. Also the impact of the cost of living will also be affected, because food deliveries and elctrical power will cost more.

But then you do not want the nation to become bankrupt, just to benefit foreigners, so you? The overall drop in living costs are due to tax payers paying for power and transportations that include foreigners or smugglers. How could honest Malaysians allow such misues of their hard earned tax money? Unfortunately, they do not care, as long as their stomach is full.

We cannot entertain such recless subsidy so we must implement selective subsidy using smart cards. Instead of restricting the subsidy to car owners, we should open it to all citizens, just like BR1M.

The argument that BR1M is political can be solved by renaming it to something else and make it a regular payment.

By right, we should make a choice of whether we want BR1M or subsidy. My friend insist on having both. No problem also. Just restrict the total amount to how much revenue the government has at that particular moment. If the price of oil goes up, more cash handout or subsidy lah. So it is fair indeed. Of course, you do not expect mega projects any more. All is up to private sectors and full paying fares from citizens of visitors.

For example, the revenue from GST was 30 billion. With a polulation of 30 million, each citizen should get RM1000. Once GST is removed, replaced by SST, the drop in revenue is only 20 billion so the remaining revenue can be collected from income tax and oil revenue.

Since 30 million includes children, let us use the number of voters as those eligible for the subsidy.
Around 15 million actually. https://en.wikipedia.org/wiki/Malaysian_general_election,_2018

So each person is entitled to RM2000 per year of fuel subsidy and BR1M. So RM1200 for fuel, RM800 for BR1M or cash. This is for  each adult, mind you, so my family should be getting RM10,000 per year. You can argue that this is too much but this is the amount of money that my family should be getting from fuel subsidy using petrol guzzling car and cash handout.

If Malaysia can afford to spend that amount currently, surely it can afford to spend this amount for every adult. Any slack can be taken by paying more taxes. I pay more taxes than this actually. Let alone in additon to tax that  my son pays.

The question is, why should Malaysian citizens impose on others, to accept fuel subsidy instead of just cash handout. We can use the same mechanism to control the amount of handout. Just like the cash handout to students. The mechanism is alread in place, although currently it is only for students.

Since many Malaysian demand to be given fuel subsidy, LET THEM HAVE FUEL SUBSIDIES, but you cannot stop the other citizens from getting cash instead of FUEL SUBSIDIES!

Again, the question will come that poor people will not get as much if they opt for fuel subsidy instead of just cash. There will be misuses of tax money that are meant for fuel instead of buying other things.

Why should you care how citizens use their tax and oil revenue? Let citizens decide equally and without any favour, if you are really honest, and do not think of you stomach only.

Of course lah, if you are rich, you cannot demand more subsidies compared to other citizens. After all, the oil revenue belongs to everyone, instead of just for the rich.

You can argue also that it is not practical because oil revenue cannot cover all the fuel subsidy.
https://themalaysianreserve.com/2018/03/07/govt-petroleum-revenue-likely-at-rm38b/
Actually can. Even more than rm30 billion.

Again, you can argue that the oil revenue is wastefully spent on just subsidy or cash for every citizens. This is nonsense, because tax is just tax. We still have other sources of tax, such as income taxes. In fact, by giving cash instead of fuel subsidy, it will generate more tax revenue, as business grows due to a large number of people spending money.

Then, another argument is that, by getting cash option, instead of fuel subsidy, there will be general inflation as more people have disposable income. Of course lah, if you want to stick to fuel subsidy in order to control prices, you are welcomed to do that, if you really want to reduce inflation.

Actually it is just an excuse because most Malaysians will spend on average on fuel costs at the same price. Instead of subsidising businesses, and lower he price of goods artifically, the real cost of goods are actually presented to citizens of Malaysia.

Even though prices of goods go up, by say, 5%, it can be covered by citizens with either direct fuel subsidy or just cash handout. So no effective inflation(effective living costs paid by citizens) to citizens, or equivalent to automatic fuel subsidy to all businesses that reduces prices by 5% (citizens living costs reduced by paying sellers).

What is the impact of choice between fuel subsidy to everyone or just cash handout to every citizen?

You will be stupid to accept fuel subsidy but it is your choice. If you want to be stupid, by all means, accept fuel subsidy, BUT YOU HAVE NO RIGHT, to stop others from accepting cash only, because the money belongs to all citizens. Remember, oil revenue ONLY. We do not use taxes revenue, not even SST.

My friend is actually a retireee. He does not travel far. His argument is that, his children travel more. And yet he insists of having fuel subsidy plus cash. Why not just ask for cash instead of subsidy, and give the extra money to his children? Strange, isn't it? Poor people demanding fuel subsidy instead of cash, where they can gain more, but unfortunately, this is the current scenario in Malaysia now.

Actually, it is well known among economists that any subsidy is only good for the rich and wasteful. The poor people, who demand fuel subsidy in much larger numbers, are the real losers. For whatever reasons, these amateur economists, want to break the natural law of economics. Many will declare that Malaysia is SPECIAL.

I am not so worried about the less benefits for the poor. It is their fault for demanding something that are not beneficial. I am more worried about the leakages to foreigners. Their excuse is that, the customs and police will be more efficient, if we can reduce corruption. In the case of neighbours, like Thailand, Brunei and Singapore, it is a good case of price promotions.

These price subsidies in the form of fuel subsidies even for foreigners only benefit certain group of businesses. The tourist industry, for example. But is it right that we sell our natural resources at a discounted price, when we can demand more revenue from our natural resources? It is just like selling our oil with a discount, instead of selling world market prices.

Oh, oil prices are different. We do not need to sell at a discount. How about industrial goods that rely on subsidised power, as a result of fuel subsidies? Becasue of lower costs of transportation and power costs, industrial goods become cheaper, so can be sold at a cheaper price. With a cheaper price, more of the goods will be sold. But at what price? It is still our hard earned tax and natural resources that we sell at a discount. We are losing big.

Malaysians, better wake up. Do not think of your stomach only.

Harris Salleh is Malaysia's best economist

http://www.bernama.com.my/bernama/v3/news_business.php?id=400288

Initially I thought it was his idea but actually it was already
implemented successfully in China.

http://www.forbes.com/2009/03/30/china-stimulus-foreign-exchange-consumers-opinions-contributors-hu-jintao.html?partner=alerts

Key to this stimulus is the stimulus for domestic trade, not export
trade. No point in exporting when there is no market for that.

Removing subsidies to be replaced by cash awards is much better
especially during the current crisis and proven in Indonesia.

This is the only way for Malaysia to become a developed nation. If
Malaysia continue to rely on subsidies and the resultant low salaries
of workers, it will not be developed at all, because development is
measured by the salary of their people, not how much buildings it has.

This is unlike the current Chief Minister of Sabah: Musa Aman, who led
Sabah to be the poorest in the whole world.

http://www.dailyexpress.com.my/news.cfm?NewsID=63904

Simply because by giving cash to the people, he won't get any
commission at all.

March 30, 2009 16:27 PM

Harris Wants Fed Govt To Emulate Thailand By Giving RM300 To Everyone

KOTA KINABALU, March 30 (Bernama) -- Former Sabah Chief Minister Datuk
Harris Salleh Monday asked the federal government to review the two
stimulus packages totalling RM67 billion and consider giving RM300
cash to every adult for a nine-month period.

He said the move was necessary to boost economic activities in the
country, particularly in rural areas.

"People will spend and will keep buying domestic products. This in
turn will keep domestic consumers and factories going.

"Thailand's stimulus package is paying 2,000 baht (RM205) to everyone
and this is a good move that we should emulate and even America with
their sophisticated society, everything is established and entrenched
livelihood, its stimulus packages are very effective.

"Its US$145 billion goes directly into the pockets of low-and middle-
income group, especially workers," he told Bernama in an interview.

Harris opined Malaysia's stimulus packages would not benefit the low-
and middle-income people as a large chunk of the RM67 billion would be
spent for infrastructure development and helping exported-oriented
manufacturing industries.

He said the objective of any stimulus package should be for the
benefit of low-and middle-income earners "who are in need and will
spend which in turn will revive the overall economy."

"The only and best way to boost rural economic activities is for the
government to abolish subsidies for rice, sugar, cooking oil and
petroleum products and at the same time also scrap school and medical
fees.

"And in return the government introduces RM300 cash payment," he said.

Harris said the RM300 cash subsidy currently given to fishermen by the
government was not fair and just.

"It's discrimination...what about the people in Tambunan, Nabawan,
Pitas and Kota Marudu who are poorer?" he asked.

Harris said: "The argument of this policy is that when prices of
subsidised goods are adjusted back to current market prices, then the
people will start feeling the pinch of high prices and high cost of
living and start working harder to produce their daily basic
agriculture products from their own areas.

"The rural people can then start working on their vacant or abandoned
land as they have been assured a steady income for the next nine
months without having to worry about their daily needs.

"They will start planting their own rice and vegetables and make
cooking oil from coconuts lying around their houses. Otherwise the
rural people will only survive on the famous Malay saying -- Kais pagi
makan pagi, kais petang makan petang," he said.

Harris, a successful corporate figure in the agriculture sector, said
the RM300 payment a month for nine months would cost the federal
government about RM2 billion a month or RM18 billion for the whole
period.

"This is much cheaper than the subsidy paid by the government. Giving
RM300 a month will in effect distribute the country's wealth equally
nationwide," he said.

He said it would also change the socio-economic status and working
attitude of the rural folk to be self-sufficient, at least for their
daily needs.

"This is an opportunity for Malaysia to use the stimulus packages to
help the low-and middle-income people to boost their economic
activities.

"Making the rural areas once and for all permanently self-sufficient
and sustainable to support at least 60 per cent of their daily
essentials.

"Even Iran is reportedly 95 per cent self-sufficent now in
agricultural output," he added.

The collapse in the price of Oil

A colleague showed me some documents which he thought proved that oil
price will go as high as US$200. It was a very long report on the
economy published in May 2008.

I believe this may have led to the sudden increase in the price of oil
recently.

If you read the facts carefully, you should come up with the
conclusion that the price of oil will not increase suddenly, but that
report put the figure up to the end of 2008 by using estimates that
are grossly exaggerated.

The demand for 2008 increases rapidly compared to 2007, while
production increases very little. These are just estimates based on
some factors quoted as the increase in demand due to the Peking
Olympics. Instead of increasing the use of Oil in Peking, the Chinese
government had prevented vehicles from travelling in major parts of
Peking.

With the sudden increase in the price of Oil, demand was curtailed
even faster. The report didn't take this into account seriously.

Even better things happen. Many nations, including Malaysia is
beginning to abandon the Subsidy mentality that afflicted ALL
developing nations, and slowly gear themselves towards the WELFARE
mentality of the developed nations.

Instead of giving money to the suppliers, governments are giving money
to the citizens.Indonesia has gone even further by giving money to all
citizens instead of just car owners as in Malaysia. No wonder there is
little protest in Indonesia.

Hopefully, more nations will achieve the developed status by realising
this simple fact. Follow the economic practises of the developed
nations instead of following the non-developed nations, if you want to
be developed. This lesson should be learned by Iran that is rich in
Oil and yet suffer from severe inflation as a result of too much
subsidy on Oil.

http://groups.google.com.my/group/soc.culture.malaysia/post?hl=en
Crude Oil Falls as Hurricane Dolly Misses Fields, Dollar Gains

By Christian Schmollinger and Nesa Subrahmaniyan

July 23 (Bloomberg) -- Crude oil fell for a second day in New York
after forecasters expect Hurricane Dolly to miss fields in the Gulf of
Mexico and the dollar rebounded, curbing investments in commodities.

Dolly is headed for northern Mexico and southern Texas, and the dollar
gained against the euro on signs U.S. interest rates may increase. Oil
futures have declined more than 15 percent from a record $147.27 a
barrel on July 11 as U.S. gasoline use fell for a 13th consecutive
week.

``There's a sense of relief from a hurricane track that keeps the Gulf
oil production in pretty good shape,'' said Gerard Burg, energy and
minerals economist with National Australia Bank Ltd. in Melbourne.
``We've seen that prices near $150 were near the top of what consumers
are willing to accept.''

Crude oil for September delivery fell as much as 87 cents, or 0.7
percent, to $127.55 a barrel, and traded at $127.82 at 1:55 p.m.
Singapore time on the New York Mercantile Exchange. Futures are up 71
percent from a year ago. The August contract expired yesterday after
declining 2.4 percent to $127.95 a barrel, the lowest settlement price
since June 5.

``That's been a realization to the market that prices reached the top
of what could be accepted in the short term,'' said National
Australia's Burg.

`Bears in Control'

The number of outstanding oil futures in New York dropped to the
lowest in 17 months as oil companies, refiners and institutional
investors exited the market. Open interest fell 2.6 percent July 21 to
1.23 million contracts on the Nymex, according to data from the
exchange.

``The bears have taken control for now and there are increasing
worries about demand growth,'' said Victor Shum, a senior principal at
Purvin & Gertz Inc. in Singapore. ``The market is very U.S.-centric,
and while the bill on speculation is nebulous, it may still take some
people out of the market.''

U.S. gasoline demand fell 3.3 percent last week from a year ago, the
13th consecutive weekly decline, as Americans react to record pump
prices by driving less, a MasterCard Inc. report yesterday showed.

Gasoline for August delivery fell 2.11 cents to $3.1259 a gallon in
New York at 12:20 p.m. Singapore time. Yesterday, it dropped 7.01
cents, or 2.2 percent, to $3.147, the lowest close since May 8.
Futures reached a record $3.631 a gallon on July 11.

Pump prices are following changes in futures. Regular gasoline,
averaged nationwide, fell 1.4 cents to $4.055 a gallon, AAA, the
nation's largest motorist organization, said yesterday on its Web
site. Pump prices reached a record $4.114 a gallon on July 17.

Hurricane Impact

Dolly strengthened over the Gulf of Mexico and became a hurricane.
Offshore fields in the Gulf are responsible for about 25 percent of
U.S. oil production. Sustained winds strengthened to 80 miles (1,320
kilometers) per hour, the U.S. National Hurricane Center said in an
advisory at 10 p.m. Houston time.

The storm is traveling northwest and the eye is expected to make
landfall about midday tomorrow.

Oil producers shut about 4.7 percent of production in the U.S. Gulf of
Mexico, as they evacuated personnel from 49 platforms and six rigs in
preparation for the storm, the government's Minerals Management
Service said yesterday.

Petroleos Mexicanos, the third-largest supplier of crude to the U.S.,
evacuated 66 workers from an oil platform in the western Gulf of
Mexico.

U.S. crude oil and fuel production plunged and prices rose to records
when hurricanes Katrina and Rita shut refineries and platforms as they
struck the Gulf of Mexico coast in August and September 2005. Katrina
shut 95 percent of offshore output in the region. Almost 19 percent of
U.S. refining capacity was idled because of damage and blackouts
caused by the hurricanes.

Dollar Gains

Brent crude oil for September settlement fell as much as $1.20, or 0.9
percent, to $128.35 a barrel on London's ICE Futures Europe exchange.
It was at $128.86 a barrel at 2:05 p.m. Singapore time.

Yesterday, it dropped $3.06, or 2.3 percent, to settle at $129.55 a
barrel yesterday, the lowest since June 5.

The dollar traded near a two-week high against the euro at $1.5795 at
12:07 p.m. in Singapore, after rising 0.9 percent yesterday and
touching the strongest level since July 10.

Senate Democrats cleared the first hurdle for legislation to curb
energy market speculation. Legislation won approval to proceed to
debate, in a 94-0 vote yesterday. Democrats said the measure could
reduce oil prices as much as 50 percent.

The legislation requires the Commodity Futures Trading Commission to
impose limits on speculative trading in oil and natural gas futures
markets. It also requires more reporting in energy markets to prevent
market manipulation.

U.S. crude-oil stockpiles probably fell last week as near- record
prices and low profit margins discouraged buying by refiners,
according to a Bloomberg News survey of analysts.

The Energy Department is scheduled to release its weekly report
tomorrow at 10:35 a.m. in Washington.

To contact the reporters on this story: Nesa Subrahmaniyan in
Singapore at nesas@bloomberg.net; Christian Schmollinger in Singapore
at christian.s@bloomberg.net.
Last Updated: July 23, 2008 02:11 EDT

Debate: Anwar vs Shaberi(Sabahan view)

http://limadang.com/2008/07/15/dato-anwar-vs-dato-shabery-debate-on-how-to-decrease-fuel-price/#comment-13050

Go to the above blog in order to read my comments and others in Sabah.

Why Petrol Price is Too High?

The article below may give an insight into the reasons why the prices
of petrol have gone up.

It is not easy to grasp.

I attended a talk on investment which includes a discussion on why the
price of petrol has gone up. I brought along my 2 children who attend
tertiary educational institutions. Both have scored As in English and
Maths.

Whey we got home, I asked them if the price of petrol will go up?
Both said that it will definitely be quoting the normally publicised
reasons, i.e. the lack of petrol due to over consumption. This is
contrary to the information given at the talk.

Just imagine how common people will understand the situation. My two
children are among the top students and yet they seem so ignorant
despite having attended a 3 hour session, which includes some basics
in investment strategies.

The fund manager does not make a decision on whether the price of oil
will go up or not but he gave these useful indicators:

1) there is no shortage of petrol as judged by the petrol stations and
general availability in world markets,
2)the future price of petrol is higher than current price in the spot
market,
3) hedge funds(i.e. unit trust companies) start trading in commodity
recently.

Despite the availability of supply, someone is buying lots of petrol
and storing them somewhere. There is a limit to how much you can store
if they are not used up.

With the removal of subsidies in petrol, there will be a tendency
towards less consumption.

My opinion is that, with the recent rapid rise, there will be a rapid
decline but the price of petrol will be higher than in 2007. The
reduction in consumption will not be enough to lower the price of
petrol.

http://www.washingtonpost.com/wp-dyn/content/article/2008/06/22/AR2008062201865.html

Obama Targets Speculation On Energy

By Anne E. Kornblut
Washington Post Staff Writer
Monday, June 23, 2008; Page A04

Sen. Barack Obama rolled out a proposal yesterday to curb speculation
in energy markets, which his advisers said would help stabilize
soaring gasoline prices.

The presumptive Democratic presidential nominee laid out a four-step
program that would, among other things, close an "Enron loophole" that
protects some trading in energy futures from federal oversight, his
advisers said.