ID :
17478
Sat, 08/30/2008 - 11:14
Auther :
Shortlink :
https://oananews.org//node/17478
The shortlink copeid
M'SIANS SHOULD CHANGE LIFESTYLE TO MANAGE HIGH OIL PRICES
KUALA LUMPUR, Aug 29 (Bernama) -- It is important for Malaysians to
change their lifestyle to help bring down the consumption of non-renewable energy while measures are being implemented to alleviate the hardship arising from cost-push inflation, the Ministry of Finance (MOF) said.
It said that this will not only help reduce energy demand to a sustainable
level but also contribute towards cleaner environment.
"Similarly, industry players must continue to invest in energy-saving
measures and use fossil fuel efficiently to maintain long-term competitiveness,"
the ministry said in its 2008/2009 Economic Report released here Friday.
It said that on the government part, to cushion the negative impact of
rising pump prices, it had decided to restructure fuel subsidies when oil
prices breached US$130 per barrel on May 21 this year by increasing pump prices
of petrol and diesel by 41 percent and 63 percent, respectively.
To moderate the impact of the increased pump prices, several measures were
adopted such as cash rebates, and subsidising diesel at RM1.43 per litre for
fisherman and transport operators while prices for cooking gas and natural gas
for vehicles remain unchanged.
The report said that factors driving high oil prices were the rising global
energy demand, especially in China and India, pointing out that according to
the International Energy Agency, demand is expected to increase more than 30
percent to 112.5 million barrels per day by 2030.
The situation is further exacerbated by the fuel subsidy system in most
developing economies, which distorted market signals regarding the actual
economic costs of energy consumption.
This resulted in unconstrained consumption of fossil fuels, especially in
the transportation sector and given the exponential growth of the sector in most
developing economies, world crude oil prices are expected to remain high, the
MOF said.
The weakening US dollar also contributed to increased speculative
activities
in the oil futures market where commodities, especially crude oil, are seen as
hedges against a weakening dollar in an environment of low interest rates,
higher inflation and slumping equity and real estate markets.
The MOF said that Malaysia as a net oil exporter, benefits from higher
crude
oil prices in the immediate term due to better terms of trade, however, high oil
prices are also a double-edged sword for the country.
Rising oil prices will impact on world growth and this, in turn, will
affect
world consumption, investment and income, it added.
The report said that like many developing countries, Malaysia subsidises
petrol prices to shield the public from volatile crude oil prices and these
subsidies cover a wide range of petroleum products which benefit all sectors in
the economy.
These subsidies were relatively benign to the fiscal position when oil
prices hovered around US$30 - US$40 per barrel before 2005, but at today's
prices of over US$100 per barrel, generous subsidies are no longer tenable, the
report said.
It said that large subsidies also resulted in the uneconomical use of
non-renewable national resources.
US$1=RM3.39
-- BERNAMA
change their lifestyle to help bring down the consumption of non-renewable energy while measures are being implemented to alleviate the hardship arising from cost-push inflation, the Ministry of Finance (MOF) said.
It said that this will not only help reduce energy demand to a sustainable
level but also contribute towards cleaner environment.
"Similarly, industry players must continue to invest in energy-saving
measures and use fossil fuel efficiently to maintain long-term competitiveness,"
the ministry said in its 2008/2009 Economic Report released here Friday.
It said that on the government part, to cushion the negative impact of
rising pump prices, it had decided to restructure fuel subsidies when oil
prices breached US$130 per barrel on May 21 this year by increasing pump prices
of petrol and diesel by 41 percent and 63 percent, respectively.
To moderate the impact of the increased pump prices, several measures were
adopted such as cash rebates, and subsidising diesel at RM1.43 per litre for
fisherman and transport operators while prices for cooking gas and natural gas
for vehicles remain unchanged.
The report said that factors driving high oil prices were the rising global
energy demand, especially in China and India, pointing out that according to
the International Energy Agency, demand is expected to increase more than 30
percent to 112.5 million barrels per day by 2030.
The situation is further exacerbated by the fuel subsidy system in most
developing economies, which distorted market signals regarding the actual
economic costs of energy consumption.
This resulted in unconstrained consumption of fossil fuels, especially in
the transportation sector and given the exponential growth of the sector in most
developing economies, world crude oil prices are expected to remain high, the
MOF said.
The weakening US dollar also contributed to increased speculative
activities
in the oil futures market where commodities, especially crude oil, are seen as
hedges against a weakening dollar in an environment of low interest rates,
higher inflation and slumping equity and real estate markets.
The MOF said that Malaysia as a net oil exporter, benefits from higher
crude
oil prices in the immediate term due to better terms of trade, however, high oil
prices are also a double-edged sword for the country.
Rising oil prices will impact on world growth and this, in turn, will
affect
world consumption, investment and income, it added.
The report said that like many developing countries, Malaysia subsidises
petrol prices to shield the public from volatile crude oil prices and these
subsidies cover a wide range of petroleum products which benefit all sectors in
the economy.
These subsidies were relatively benign to the fiscal position when oil
prices hovered around US$30 - US$40 per barrel before 2005, but at today's
prices of over US$100 per barrel, generous subsidies are no longer tenable, the
report said.
It said that large subsidies also resulted in the uneconomical use of
non-renewable national resources.
US$1=RM3.39
-- BERNAMA
