Global markets, now roiled by the Covid-19 outbreak, are shaken once again when global oil prices took a historic plunge over the weekend. The only upside to this is the lower price at the gas pumps – MIDF Research expects prices for RON 95 to hit a new low of RM1.32 per litre, but stressed that the negatives far outweigh the positives, Berita Harian reports.
To bring you up to speed, the drop in oil price is due to Saudi Arabia slashing its export oil prices over the weekend, initiating what seems like the start of a price war aimed at Russia. The move was a deliberate display of retaliation over Russia’s refusal to join the Organisation of the Petroleum Exporting Countries (OPEC) in a large production cut as the coronavirus continues to slow the global economy and, with it, demand for oil.
Currently, the Brent global oil benchmark is around US$31 (RM130.50) a barrel, after prices plunged by about US$11 a barrel (or 25%) on Sunday. According to the New York Times, this is the sharpest decline since at least 1991, and Saudi officials have already made preparations to ramp up the kingdom’s oil output to compensate for the lost revenue caused by the steep discount.
If oil prices stay at around US$35 (RM147), inflationary pressure is expected to stay low, and this will support domestic consumption. However, the drop in global fuel price will impact the country’s fiscal capacity, considering that the Budget 2020 was drafted based on the then-stable oil prices of US$62 (RM261) a barrel.
In a note, MIDF Research said it is expecting Malaysia’s gross domestic product (GDP) growth to be “under pressure” in 2020 at this juncture, as oil prices continue to fall. “The newly formed government will likely revise the Budget 2020 and we may see a reduction in government expenditure and investment,” it added.
Apparently, every US dollar drop in crude oil prices would impact the nation’s coffers by up to RM300 million for the year. Lower oil and gas prices have caused the mining and quarrying sectors contribution to drop last year, which partly affected Malaysia’s slowing GDP growth.
According to reports, there’s a slim expectation that this cut-price move will be short-lived as the oil producers – Saudi and Russia – can still reach a compromise. Otherwise, pundits expect oil prices may dip under the 2016-low of US$26 (RM109.47) a barrel.
For the week of March 7 to 13, the price of Euro 4M RON 95 petrol retails at RM1.89 per litre (dropped 19 sen from RM2.08 in the previous week), while RON 97 is priced at RM2.19 per litre – a 21 sen drop from the previous RM2.40 mark. Euro 2M diesel costs RM1.96 a litre (17 sen down), whereas Euro 5 diesel is RM2.06 per litre.
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Why are you still showing this mad man’s face here?
Hidup BN/PN! ini semua sarahan …
PDAM closed shop for 2 months honeymoon OK?
Thank you Saudi Arabia
Mother Russia fulfill your manifesto RM1.32/L petrol diesel.
Thank you PM8
But PH sapoter been telling it was due to PH clean(ing out the coffers) and good (at making fake promises) governance worr. So he lied?
Oh course he did bro. Been lying to us for 21 months.
Told uollls , I am innocent. I did not lying …
The truth shall prevail and only those who still fights are truly innocent. You get my like.
Copy paste: “Malaysians made the right choice finally!”
So being lied for 60 years is better than being lied for 21 months…. Save me from ur logic pls
PH, thru their many incarnations, have been lying to us for nearly 62 years(60 years + 21 months). Is that better in your logic? Wakakaka
USD$1=RM$5 coming soon
Kept my money in USD… hail new PM! Booyahh
“there’s a slim expectation that this cut-price move will be short-lived”
Now, let me daily drive a 5.7L V8 SUV navigating city centre.
Wow! PN comes in and fate has smiled on them with cheap fuel prices. I wonder why god never smiled on PH like that.
The positive is that it will encourage the speeding-up of EV, renewable and efficient energy technology while the downside is that it may lead to job losses from cost-cutting measures.
Renewables are not efficient. The sun doesn’t shine all the time and the wind doesn’t blow all the time either. They use vast tracks of land that need to be cleared and both kill a lot of birds. If you’re serious about clean, cheap and reliable energy, we should consider nuclear.
You forget about nuclear waste, those so called clean nuclear power plant produce the most dangerous waste out of them all. Remember Lynas, those developed countries dump their waste on our land.
What about nuclear fusion? Surely there are ways to make nuclear energy a lot less polluting, if done in an effective fashion.
The Petrol Dealers Association of Malaysia (PDAM) president Datuk Khairul Annuar Abdul Aziz will surely come out another press statement that petrol stations are closing down due to losses as petrol prices keep going down. trust me, surely another press statement will be released.
hahah, they just stated this moment ago!
Rather than CUTTING Expenditure … Which is going to HURT the RURAL MALAYS ( Subsibies, Pension, Grants, Etc ) , Bonuses ( For Govn Servants, etc ) , OTHERS ( Political sunsidies ) ……. They are likely to HAVE a DEFECIT of – 3 to -6 %. Ringgit will DROP to US = Rm 5/ …… But Rich ELites HAVE already shifted to US$ since 3 months ago.
Good for motorists.,but downside petronas cant send MDin much $$$$,so taxes will go up.Income tax,excise,import taxes will take a spike.Time to buy preowned cars.Honda already spiked car prices.
Then our PDAM dealers…many will cry for bailouts,if not chuplup.Just because of a tiny rampaging virus.
Who’s stupid now?!
Malaysians made the right choice finally!
yess..so 2013 pkr manifesto to reduce the oil price to rm1.50 is not impossible now. please PN make it to reality.
PH janji but it is left for PN/BN to fulfill it even when they never janji that. How magnanimous is PN/BN are to the rakyat. Well done!
meanwhile rakyat marhaen think PN janji dicapati turunkan harga minyak
This shows how much the price of Petroleum is fictitious man made rather than the following the law of supply & demand. A single country/organization can decide the price to drop 25% overnight without giving any real thought of the impact to the rest of the world, just because Russia will not listen to their demand.
I really hope I can live long enough to see their faces when fossil fuel is replaced by efficient and clean energy. By that time, their only exports will probably “terrorists & other extremist teachings” and the general world will probably regards the whole area as “wasteland”
Trouble is that most governments would like to see your hopes and dreams CRUSHED under their will. Why go petrol-less when a lot of profit comes from fossil fuels?
Until we all realize that we MUST give up our thirst for fossil fuels, we will ALL lose.
EVERY. SINGLE. TIME.
cukur
Let the global oil price war persists indefinitely – good for consumption & low inflationary environment, given the current adverse global economy & much suppressed oil demand. It will gradually transformed into a ‘survival of the fittest’ economic scenario!
Lol! PH dah mampus tapi masih lagi x serik mau ambik kredit utk manfaat yg bukan dari usaha mereka. itulah sbb diaorang dah mampus.
Why not you just say PH memang mau bagi free saja, but Tun M collapsed PH gomen before they had the chance.
For the past 84 weeks they had plenty of chances so why procrastinate always telling they will do this and that but never does it? Did they thought they were invincible and untouchable? That shows us how out of touch with reality PH became so soon after taking power.