Wednesday, November 7, 2007

Petrol - it is going to be more expensive!

In the height of last year's hullabaloo over the hike in petrol prices, the government came out with a booklet, seeking to explain its stand and the rationale for the upward adjustment.

One point that particularly caught my attention was on Malaysia as an exporter of oil.

According to our national data,Malaysia would, in the absence of new major discoveries of oil reserves, encounter a dramatic change in our oil exporting position by 2011 - from the present net exporting to the then importing.

The data, reliable to a tolerable extent, implies that by 2011, all Malaysians would have to adapt to a situation whereby our oil production would be insufficient to meet own needs.

This tellingly sends a signal across the whole nation that our government would find it burdensome to continue the present subsidization programme.

Judging from the deficit budget situation we are presently in and the volatility in international oil prices, it is more likely for our government to gradually cut subsidy to lessen its financial burden, with objective to eventually go without by 2011.

This may sound horrid, but we got to learn to face up to it!

Against the above backdrop, it is hardly a surprise for our PM to caution the whole nation that our good days with subsidised petrol may be completely over by 2011.

The message is explicitly clear - our cheap petrol era is slowly going into history.

Let's all wake up to the reality - be prepared for much more expensive petrol in future!

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