MALAYSIANS PAYING PREMIUM FOR PETROL SINCE 2006?

Prime Minister Abdullah Badawi has just announced that the price of fuel will remain for the rest of 2008. The Government will not budge even the market price breaches the US$ 200 per barrel mark.

Once again, the PM took the trouble to explain the RM 0.30 per litre formula, announced last week.

According to the PM, the full market price of fuel should be RM 3.45 per litre based on today's international price of US$ 132 per barrel. Therefore the pump price for July should actually be RM 3.15 per litre, the nett price after deducting the subsidy of RM 0.30 per litre.

We are supposed to be grateful as we are actually getting a very attractive deal now because the Government will maintain the pump prices at RM 2.70 till end 2008.

This means our poor Government has to fork out a subsidy of RM 0.75 per litre (RM 3.45 - RM 2.70) now, more than double the RM 0.30 per liter the Government was initially willing to spend.

Let's do the simple maths now. If the non-subsidised price should be RM 3.45 per litre when the international market price is at US$ 132 per barrel, this means the pump price should be about RM 1.70 if the price per barrel is US$ 65 per barrel. Agree?

US$ 65 per barrel was the international market price of crude oil when the our domestic pump price was raised from RM 1.62 per litre to RM 1.92 per litre back in February 2006!!!

Looking at this simple analysis, does this mean we were already paying a price that was higher than the market price even back in February 2006?

Even without a single cent of subsidy, the price per litre should have been RM 1.70 but we paid RM 1.92 instead. Based on the same basis of calculations, we paid the market price, plus a RM 0.22 per litre as premium!!!

The Government then claimed that the subsidy was unbearable and eating into the development funds. The increase was justified on the basis that it will help save RM 4 Billion that will be used for improving the public transport.

How would there be savings if the public is already paying the full price at the pump plus additional premium of RM 0.22 per litre.

Something must be wrong somewhere. The figures given to us just don't seem to match up at all. Perhaps, someone up there is feeding errorneous information to our PM. Can someone help us solve this mathematical mystery?

No wonder a certain opposition leader is so confident of reducing the fuel price if voted into power. Now we know its no longer a probability, possiblity but an absolute certainty!