Idris: There’s no global fuel shortage
By WONG SAI WAN, The Star
Thursday June 5, 2008

 

 

ISTANBUL: There is no shortage of oil in the world and its present price level was driven up by unreal speculation, said Malaysia Airlines managing director and chief executive Datuk Seri Idris Jala.

He said the present oil price at over US$135 was unrealistic and based on certain global events that might have caused a shortage of supply.

“These people (speculators and hedge funds) buy oil futures and say that this or that event may cause an oil shortage.

“Not very long after this, people react to this and by then the message would be ‘there is a shortage of supply’ even though there is none,??? Idris told the international media here at the close of the 64th International Air Transport Association annual general meeting.

IATA, which is an association of legacy full service airlines with over 200 members, had issued a statement at the end of its meeting that the industry was now in a state of an emergency because of the fuel price crisis.

Idris was a former senior executive with Shell Plc based in London and the Hague for almost 20 years. While there, he had headed various departments, including business development.

Speaking as a former oilman, Idris said there were two ways to see whether there was an oil shortage.

“First, look at the oil tankers at sea. If they are not moving and just floating out at sea, that means they have no crude or processed oil to transport. That is not happening and that means there is no shortage.

“Second, go to the petrol stations. If there are long queues, that means there is a shortage. Again, this is not happening and this can only mean there is more than enough supply.

“As an ex-oilman, I tell you there is no shortage.???

Idris pointed out that certain analysts and financial companies that produced reports about the shortage were also oil futures traders.

Asked what he thought was the fair value of crude oil at present, Idris replied: “US$40.???

He also criticised speculators and hedge funds, saying that he did not trust anything that he could not touch.

“I always believe in the brick and mortar – something I can touch. These people are trading with nothing.

“Many years ago, we at Shell had wanted to buy Enron. I was leading the team then and we hired over 60 consultants to study how a company with no oil fields, refineries or gas stations could make so much money.

“One of the consultants tried to convince me to recommend to the Shell bosses to buy Enron but I said no because I could not touch what they were trading in,??? Idris said in the one-hour briefing for the media about MAS’ performance and future.

He only expressed his opinion on the oil crisis after being asked by several journalists.

Idris was proven right on Enron because the so-called energy company collapsed four years ago under massive accounting fraud.

By : Jeeva Arulampalam and Rupa Damodaran, The New Straits Times
June 5, 2008

 

 

KUALA LUMPUR: Economists said inflation could double to six per cent this year after the government decided to increase fuel prices and allow electricity tariff to rise.

They also think that economic growth could fall below the government’s official target of between five per cent and six per cent.

Bank Islam Malaysia senior economist Azrul Azwar Ahmad Tajudin said consumer spending would be hit, resulting in a cutback on non-essentials.

“People will not be spending on designer labels and expensive restaurants or will think twice about buying new cars and properties,??? he said.

Thus, businesses that depend on consumer spending such as retail, tourism, travel and automotive are likely to be badly affected.

“Not only are there threats of lower revenue for businesses that are directly affected, the risk of slower economic growth could pull the overall (stock) market down,??? said Azr ul.

CIMB Investment Bank chief economist Lee Heng Guie expects the impact to be felt in the second half of the year.

“The economy will go through a phase of adjustment,??? he said.

AmInvestment Bank economist M. Manokaran said the price increases came at a time when food prices had hit an all-time high.

On the cash payments of RM625 for cars of 2000cc and below, they said an average of RM52 per month was insufficient to weather the steep 41 per cent rise in petrol price.

For instance, a 1600cc car which consumes 250 litres of petrol monthly would have to pay RM675 now, compared with RM480 previously.

Manokaran said the central bank would have to review the current overnight policy rate, which determined banks’ lending rates.

“Bank Negara can’t hold at 3.5 per cent and we could see an adjustment of 25 to 50 basis point in early third quarter (July or August),??? he said.

By The New Straits Times
June 5, 2008


MALACCA: Chief Minister Datuk Seri Mohd Ali Rustam has described the fuel price increase and subsidy scheme as appropriate policy to ensure that the subsidy goes to the needy, reports Jason Gerald.

"Although those who do not deserve the subsidy would have to pay more, the poor will still receive a cash rebate

"This will ease the burden of those in the lower-income group."

He urged the people to change their lifestyle, stressing that the fuel price increase was inevitable, given rising global prices.

Mohd Ali suggested that Malaysians use public transport or carpool.
"Now is the time for Malaysians to rally around and help the government overcome the global oil crisis.

"We have to acknowledge the fact that the prices of petrol and diesel in Malaysia are still the lowest in the region."

In Kota Baru, a Pas government spokesman said they were supporting the price increase and subsidy scheme as the poor would still be assisted.

In Ipoh, Brenda Lim and Veena Babulal report that state Local Government and Public Transport Committee chairman Nga Kor Ming has described the subsidy scheme a failure.

"It has failed to address the crux of the issue, as a major portion of fuel subsidies is enjoyed by independent power producers."

He called on the government to reveal the contracts signed with IPPs.

Ipoh City Watch president Chan Kok Sun said money saved from reducing fuel subsidies should be used to improve the public transport system and subsidise transportation companies.

Chan said Malaysians would use public transport if the system was efficient and dependable.

On the proposal for higher power tariffs, he said Tenaga Nasional Bhd's monopoly in the peninsula should be abolished.

In George Town, Deputy Chief Minister II Dr P. Ramasamy criticised the cash-back system for motorcyclists and owners of small cars, Phuah Ken Lin and Adie Suri Zulkefli report.

He said the rich could abuse the system by buying smaller cars and using motorcycles.

He also questioned the rationale behind the imminent increase in electricity tariff.

Ramasamy said he was concerned that the power tariff increase would have a domino effect on prices of goods and services.

"I do not think that it is a wise move to raise the tariff now in view of rising food prices."

State Umno liaison committee deputy chairman Datuk Seri Abdul Rashid Abdullah said the people should accept the fact that the government had been subsidising fuel prices for a long time and could no longer do so.

"The government has listened to suggestions that those who can afford luxury or bigger vehicles must pay more at the pump."

On the electricity tariffs, Abdul Rashid said the government should not be made to absorb the escalating cost of producing electricity.

In Shah Alam, Neville Spykerman reports that Menteri Besar Tan Sri Khalid Ibrahim was concerned about the implementation of the subsidy scheme.

Khalid said although the cash-back system was good in theory, owners of small cars may not necessarily be driving them.

He, however, welcomed the move not to increase the price of LPG cooking gas or compressed natural gas.

In Kota Kinabalu, Consumer Association of Sabah and Labuan (CASH) president Datuk Patrick Sindu urged the people to make changes to their lifestyle.

Sindu, who is attending a food security conference in Rome, said rising prices of fuel, food and other items was a global problem and Malaysians could not be insulated forever, Jaswinder Kaur reports.

Sindu said the decision not to increase the price of cooking gas was probably to "pacify" the people.

Voluntary price watch group Rakan Pengguna Sabah (Sabah Consumer Friend) chairperson Datuk Amisah Yassin said she hoped traders would not raise prices of goods and services.

"We welcome any move taken by the government to assist the lower-income group but if traders take advantage of the situation, we are back to square one."

Amisah urged consumers and Rakan Pengguna members to write to the Domestic Trade and Consumer Affairs Ministry to complain about traders who charged unreasonable rates for goods and services.

Yes, let us get angry, but about the right things
By Raja Petra Kamarudin
Thursday, 05 June 2008

Petronas is too important to the nation. Petronas is the backbone of the Malaysian economy. Without Petronas this country would be dead. Should something that important be under the control of just one man where even Parliament has no say over it?

NO HOLDS BARRED - Raja Petra Kamarudin

We should not worry so much about the petrol price increase. Even if Pakatan Rakyat had formed the federal government and even if Anwar Ibrahim had become the prime minister we would have still suffered this price increase. So is it fair to target Abdullah Ahmad Badawi singly for this petrol price increase?

The blame for the increase in the price of petrol should not be placed on the shoulders of one man and it should be seen within a bigger picture rather than in isolation. Could Abdullah Ahmad Badawi have done anything about it even if he wanted to? Or is Abdullah Ahmad Badawi a victim of circumstances, who anyone who was heading the government today would also have to endure?

It is very easy to blame someone else for our problems. Who, after all, would want to admit that he or she is the problem? And the most unpopular move a government can make is a move that affects your pocket.

Do anything. Kill detainees in the police lockup. Detain political opponents and dissidents without trial on the lame excuse that they are threats to national security. Spend billions of the nation’s money on white elephants and monumental projects. Siphon out billions of Ringgit in ‘commissions’ from government projects and stash the money in numbered Swiss bank accounts. Kill of all the Rainforests. Mess up the environment. In short, do whatever you want. Just don’t put any strain on my pocket. The instant you touch my pocket, then, and only then, will I rise up in anger. That is the mentality of the Malaysian Rakyat.

We should not get upset with the increase in the price of petrol. What we should get upset about is the fact that over 34 years since 1974, Malaysia has earned an estimated RM2 trillion in oil revenue. I say ‘estimated’ because that is the only basis we can use in figuring out what the actual amount is. Petronas’ accounts are not published and are not tabled before Parliament. According to the Petroleum Development Act 1974, Petronas need not make its accounts public. Petronas need not even report to anyone, not even to Parliament. Petronas reports to just one man, the Prime Minister of Malaysia.

Petronas is too important to the nation. Petronas is the backbone of the Malaysian economy. Without Petronas this country would be dead. Should something that important be under the control of just one man where even Parliament has no say over it? That is what we should be angry about. We should not be angry that the price of petrol has increased. It is not Abdullah Ahmad Badawi’s fault.

Okay, if we want to still be angry with Abdullah Ahmad Badawi, then let us be angry about the fact that just before the 8 March 2008 general election the government promised the voters that the price of petrol would not be increased. Then, even before 100 days after the general election, they go and increase it. They lied to us. They led us to believe that if we voted for them the price of petrol would not be increased. Then, after 50% or so of Malaysians voted for them, they go and increase the price of petrol. If they had been honest and had said that as soon as the general election is over they will increase the price of petrol, then 50% of Malaysians would not have voted for them. If they had been honest and had said that as soon as the general election is over they will increase the price of petrol, then more than five states would have fallen to Pakatan Rakyat and Barisan Nasional would no longer be the federal government.

Yes, that we can be angry about, if we want to be angry about something. Be angry that they lied to us. Be angry that they got 50% of Malaysians to vote for them under false pretences. But we should not be angry with Abdullah Ahmad Badawi for increasing the price of petrol when he really had no choice in the matter.

I am not angry about the increase in the price of petrol when Abdullah Ahmad Badawi could not avoid increasing it. I am angry that he was forced to increase it. Why was he forced to increase it? And what happened to the estimated RM2 trillion that Petronas has earned over 34 years since 1974? And why are the accounts not made public or tabled before Parliament? Was not Petronas set up through an Act of Parliament via the Petroleum Development Act 1974? Therefore, should not Parliament have the power and authority to demand that Petronas table its accounts before Parliament? Why are the accounts secret? And why should Petronas report to only one man?

Petronas should be turned into a pubic listed company. Petronas should be called Petroleum Malaysia Berhad or Petromas Bhd or PMB and it should be listed on the Kuala Lumpur Stock Exchange and its accounts should be made public like all other public companies. Then PMB must hold annual general meetings and all shareholders who hold even just one share should be allowed to attend these AGMs and be allowed to ask questions. And the Directors of PMB should be both nominees of the majority shareholders (meaning the government) plus representatives of the minority shareholders (meaning you and me who hold just one share or one lot of shares). And the Directors of PMB (in particular those representing the minority shareholders) should be appointed at the AGMs. And if the shareholders are not happy with the Directors, then the shareholders can remove them via an EGM if the minimum requirements for an EGM are met.

That is what should be done, but is not done, and that is what we should be angry about. We should not be angry about the increase in the price of petrol when the increase is unavoidable and Abdullah Ahmad Badawi has really no other alternative. And we should also be angry about the fact that Abdullah Ahmad Badawi had no alternative but to increase the price of petrol. And we must not forget to also be angry about the matter of the estimated RM2 trillion that Petronas has earned over 34 years since 1974. And we must certainly be angry about the fact that we do not really know how much money Petronas has earned over 34 years since 1974 or what happened to the money. And we must remember to be angry about the fact that Petronas need not table its accounts or report to Parliament and about the fact that only one man, the Prime Minister, knows what is going on in Petronas and how much it has really earned and where all that money has gone to.

Oh, and since we are in the mood of getting angry, let us also get angry about the estimated RM30 billion that Terengganu has earned, which we do not know where the money has gone, and about the estimated RM30 billion that Sabah and Sarawak have also earned, which we also do not know where the money has gone. And let us also get angry about the estimated RM1 trillion that Petronas paid the government by way of corporate tax, which we also do not know where the money has gone. Furthermore, let us also get angry about the estimated RM900 billion or so that Petronas did not pay Terengganu, Sabah, Sarawak, or the federal government by way of corporate tax, which we also do not know where the money has gone.

Yes, let us get angry about all that. But let us not get angry about the increase in the price of petrol because this is just the end result of all the other things we should really be angry about but somehow are not. And let us not blame Abdullah Ahmad Badawi for increasing the price of petrol. It is not Abdullah Ahmad Badawi’s fault. He has no alternative but to increase the price of petrol. Instead, we should be angry with ourselves. We kept quiet over 34 years since 1974. We did not care what they did with Petronas over 34 years since 1974. We did not bother to ask what they are doing with the estimated RM2 trillion of Petronas’ money. We did not demand that the public or Parliament get to peep into Petronas’ accounts. We just continued voting for Barisan Nasional over 34 years since 1974 without a care in the world. We should be angry with ourselves for the increase in the price of petrol, not with Abdullah Ahmad Badawi.