Menteri Tak Setuju Cadangan Stesen Minyak Tentukan Harga Minyak Sendiri
Anda mahu berkongsi berita ini?
Datuk Seri Hasan Malek
Menteri Perdagangan Dalam Negeri Koperasi dan Kepenggunaan, Datuk Seri Hasan Malek berkata kuasa bagi mengawal harga minyak tidak akan diberikan kepada pengusaha stesen minyak walaupun langkah itu dikatakan bakal membantu rakyat Malaysia menikmati harga minyak pada harga yang lebih rendah.
Menurut Datuk Seri Hasan, hanya Putrajaya yang mempunyai kuasa untuk menentukan harga minyak.
“Tidak boleh, harga ini ditentukan oleh kerajaan,” katanya memetik laporan dari The Malaysian Insider.
Pengarah Eksekutif Pusat Penyelidikan PAS, Dr Dzulkefly Ahmad semalam mencadangkan agar kerajaan membenarkan harga minyak dikawal oleh pengusaha minyak supaya harganya lebih kompetetif sekaligus menguntungkan rakyat.
“Pengusaha stesen minyak boleh menawarkan harga yang lebih rendah dari harga siling, yang mana boleh dilihat diamalkan di negara maju lain. “Dengan cara ini, ia membolehkan satu persaingan di antara pengusaha minyak, selain memberi banyak pilihan kepada pengguna,” kata Dzukefly di Kuala Lumpur semalam. – Siakapkeli.com.my
KUALA LUMPUR: PAS has called on the government to impose a ceiling price for petrol and diesel so as to allow petrol stations to compete with each other which will then give vehicle owners the option of filling their tanks at the station which offers the lowest price.
“The rakyat must benefit and a healthy competition on the price of petrol and diesel will be good,” said PAS research centre executive director Dr Dzulkefly Ahmad.
He said this mechanism has been implemented in the United Kingdom where consumers are allowed to choose petrol kiosks to suit their needs.
“Currently in Malaysia, Petronas has 1,000 stations, Petron 500 and Shell has more than 1,000 outlets. Consumers can choose their stations if the mechanism on pricing is in place,” he said, adding that the government should consider looking into this proposal for the benefit of the rakyat.
He also suggested for the replacement of MOPS (Mean of Platts Singapore) with another benchmark as the country has its own infrastructure to produce and filter crude oil for the nation’s consumption.
MOPS is the variable value which is used as an automatic pricing mechanism used in managing the float on fuel prices.
“It is essential that Malaysia continues to prioritise inclusive growth and social cohesion, and moves forward with the second generation policies that are needed to support this.” – Frances Stewart Find out more at http://www.mhdr.my
The Malaysia Human Development Report 2013 (MHDR) is the country’s first nationally-owned, independent report of its kind, with a focus on inclusive growth. Themed “Redesigning an Inclusive Future”, the report is an analysis of the country’s development since the New Economic Policy (NEP) was implemented in 1971.Kamal Salih MHDR 2013
The launch of the report presents an opportunity for all Malaysians to be part of a national dialogue on past progress, current challenges, and steps forward as we move into the 11th Malaysia Plan (2016 – 2020) and towards attaining Vision 2020.
New Straits Times Online, by Kamal Salih, 21 September 2014, 8.08am
IN development thinking and practice, no policy has captured the imagination nor created more controversy in its implementation among scholars, politicians and the public alike than the New Economic Policy, introduced some 45 years ago. A generation had debated, lived and benefited from the NEP, until its formal ending in 1990.
Or so it seems in hindsight. The policy debate and the concerns surrounding the policy never really ended, for the issues of inequality along class and ethnic lines in our multiracial country remained stubbornly intransigent, even after its success (a controversial notion in itself) and new incarnations of the NEP in subsequent years.
Pengarah Eksekutif Pusat Penyelidikan PAS, Dr Dzulkefly Ahmad berkata, harga minyak mentah dunia menurun 40% tetapi harga runcit minyak di negara ini hanya diturunkan 1.7%. – Gambar fail The Malaysian Insider, 4 Disember, 2014.
Putrajaya perlu membenarkan persaingan syarikat minyak dalam menentukan harga pasaran bagi membolehkan rakyat menikmati harga runcit yang lebih rendah, kata PAS hari ini.
Pengarah eksekutif pusat penyelidikannya, Dr Dzulkefly Ahmad berkata, di saat harga minyak mentah dunia mencatatkan penurunan sebanyak 40% tetapi harga runcit bahan bakar di negara ini hanya diturunkan pada kadar 1.7%.
”Sejak minyak dinaikkan 20sen pada 2 Oktober lalu, rakyat perlu menambah RM8 pada setiap pembelian 20 liter. Tidak diketahui mengapa begitu jadinya. Bagaimanakah sistem apungan terurus ini diuruskan?
“Kalau kerajaan pusat boleh memberi jaminan keuntungan kepada syarikat minyak dan juga stesen minyak, PAS dan Pakatan Rakyat menuntut supaya kerajaan juga terus memberi ‘subsidi’ kepada rakyat bagi memastikan harga runcit dapat diturunkan.
“Ia juga bagi mengurangkan kesan berantai terhadap barangan dan perkhidmatan,” katanya dalam satu kenyataan hari ini.
Dzulkefly berkata, Putrajaya juga perlu mencari kaedah atau ‘benchmark’ baru yang lebih telus menggantikan Mean of Platts Singapore (MOPS) dalam mengira harga minyak runcit semasa.
“Mengapa guna MOPS sehingga kini? Kita cukup kapasiti menapis minyak selama 30 tahun dari 1983 membangun industri penapisan minyak dan gas yang sudah matang di Melaka, Port Dickson dan Terangganu.
“Mekanisme Harga Automatik (APM) juga memerlukan satu kajian semula,” katanya yang mendakwa Brunei dan dan Arab Saudi tidak lagi menggunakan sistem MOPS.
Berkuatkuasa 1 Disember lalu harga runcit RON97 turun sebanyak 9 sen seliter kepada RM2.46 seliter dan harga runcit RON95 pula turun 4 sen seliter kepada RM2.26 seliter.
Menteri Perdagangan Dalam Negeri, Koperasi dan Kepenggunaan Datuk Seri Hasan Malek berkata, harga runcit bagi minyak diesel pula dinaikkan kepada 3 sen seliter kepada RM2.23 seliter.
Harga runcit RON97 kini ialah RM2.55 seliter, RON95, RM2.30 seliter manakala diesel ialah RM2.20 seliter.
Menurut Hasan, harga baharu ini akan berkuat kuasa hanya untuk Disember.
“Kerajaan akan mengikuti perkembangan pasaran harga produk kos pada setiap masa dan kadar pertukaran matawang untuk menetapkan harga runcit petrol dan diesel bagi bulan-bulan berikutnya,” katanya dalam kenyataan hari ini.
Sehubungan itu, katanya semua syarikat minyak dan pengusaha stesen minyak diminta mematuhi penetapan harga baharu itu dan jika ingkar, tindakan tegas akan diambil mengikut Akta Kawalan Bekalan 1961.
Pada 21 November lepas, kerajaan mengumumkan akan melaksanakan penetapan harga runcit bagi petrol RON95 dan diesel mengikut kaedah pengampunan terkawal mulai 1 Disember.
Kaedah pengapungan terkawal yang diputuskan Kabinet itu adalah sebagaimana pelaksanaan penetapan harga runcit RON97 sejak Julai 2010, katanya.
“Melalui kaedah pengapungan terkawal, purata perubahan kos produk akan menentukan penetapan harga bagi bulan berikutnya, ini bermakna jika harga pasaran minyak mentah dunia meningkat, harga runcit RON97, RON95 dan diesel juga akan meningkat dan begitu sekiranya berlaku sebaliknya (harga pasaran minyak mentah dunia menurun).”
Ekoran itu, Dzulkefly turut mencadangkan kerajaan untuk menetapkan “Harga Siling” atau “Ceiling Price” bagi petrol dan diesel, bersesuaian dengan harga pasaran semasa.
Kerajaan juga, tambah beliau diminta memberi keizinan kepada lima syarikat minyak yang beroperasi ‘bersaing antara satu sama lain‘ dalam menwarkan harga runcit di station petrol.
KUALA LUMPUR: Kejatuhan harga minyak mentah dunia turut menyumbang kepada kejatuhan nilai ringgit berdasarkan konsep permintaan dan penawaran, selain faktor sentimen dan persepsi di kalangan pelabur.
Pengarah Eksekutif Pusat Penyelidikan PAS, Dr Dzulkefly Ahmad, menegaskan sebagai negara tunggal dalam mengeksport minyak di seluruh Asia Tenggara, sentimen dan persepsi terhadap Malaysia akan jatuh, ditambah dengan hutang negara yang semakin membengkak.
“Apabila harga minyak mentah menjunam, hasil negara akan berkurangan selain hutang kerajaan yang kekal membengkak. Maka ia akan menyebabkan persepsi dan sentimen terhadap negara jatuh apabila mereka mula menolak untuk berurusniaga dalam nilai ringgit (dan lebihan akaun semasa mula menurun),” tegas beliau pada satu sidang media di Pejabat Agung PAS, hari ini.
Begitu juga penggantungan nilai mata wang itu, katanya berdasarkan konsep permintaan dan penawaran yang jelas akan terjejas apabila permintaan terhadap ringgit berkurangan.
Katanya, sekiranya permintaan terhadap Ringgit Malaysia tinggi, maka nilai mata tinggi, dan begitu juga sebaliknya.
Sehubungan itu, beliau mendesak Datuk Seri Najib Tun Razak untuk berbuat sesuatu bagi memastikan nilai mata wang dipertahankan, selain mengawal perbelanjaan dan hutang negara gan dengan lebih pruden serta tidak terus culas.
Dalam pada itu, beliau berkata biarpun harga minyak mentah dunia terus menjunam, ia bukanlah satu petanda baik bagi Malaysia yang merupakan negara pengeluar minyak di Asia Tenggara.
Malah, kejatuhan harga minyak mentah dunia itu menyebabkan negara berisiko untuk kehilangan hasil negara, yang kini sudah mencecah RM25 bilion bersamaan dengan 2.3% KDNK.
Dzulkefly menegaskan keadaan itu bertambah rumit dengan hutang kerajaan yang terus membengkak, di samping pelbagai keberantakan sosio-politik di garis etnik dan agama muktahir ini.
“Ketika negara-negara jiran bergembira dengan penurunan harga minyak mentah dunia itu, ia berbeza dengan Malaysia yang disifatkan sebagai negara pengeksport minyak ” kata beliau.
Sekalipun RON95 dan RON97 telah diturunkan, katanya rakyat tidak teruja dengan keadaan itu kerana harga diesel dinaikkan 3 sen ekoran kejatuhan minyak mentah dunia ke paras $68 se tong.
“Ramai sangsi bagaimana kira-kira dibuat tentang harga runcit, di mana pada penurunan minyak mentah 40 peratus sejak September lalu, dari $115 kepada $70, penurunan hanya pada takuk 1.7 peratus sahaja. Apakah dan bagaimanakah apungan terkawal dilakukan kerajaan?” soal beliau.
Jelas Dzulkefly, harga runcit ditentukan oleh Mean of Platt Singapore (MOPS) yang memasukkan kos operasi sebanyak 9.54 sen, 5 sen keuntungan syarikat minyak, 12.19 sen keuntungan stesyen minyak dan 5 sen Alpha yang berperanan sebagai penimbal, yang kesemuanya berjumlah 31.77 sen.
Tambah Dzulkefly, jika dilihat kepada mekanisme MOPS ini, kerajaan dilihat memberi jaminan keuntungan kepada syarikat-syarikat dan stesyen-stesyen minyak, bagaimanapun tidak memberi jaminan kepada rakyat.
Sehubungan itu, tegas Dzulkefly sebagai sebuah negara pengeluar minyak, Malaysia disarankan agar mewujudkan “Tanda Aras” atau “Benchmark” kita tersendiri yang menandingi MOPS. Brunei dan Saudi tidak menggunakan MOPS.
Sudah sampai masanya, kata beliau Malaysia yang berkeupayaan untuk menapis sendiri minyak memikirkan tanda aras tersendiri bagi mengelak ketidaktelusan tentang hitungan MOPS kerana kita sudah punya ‘piawaian’ dan tahu akan segala kos dalam mengeluarkan RON 97, RON95 dan diesel di negara ini.
“Kita telah lama menggunakan MOPS, sedangkan keupayaan negara menapis minyak dan gas sudah melebihi 30 tahun, dengan stesyen penapisan di Port Dickson, Melaka, dan Terengganu. Kita menapis seluruh minyak mentah kita sendiri 500,000 tong atau barrel sehari ” tegas beliau.
Ekoran itu, beliau turut mencadangkan kerajaan untuk menetapkan “Harga Siling” atau “Ceiling Price” bagi minyak, bersesuaian dengan harga pasaran semasa.
Kerajaan juga, tambah Dzulkefly diminta memberi keizinan kepada lima syarikat minyak yang beroperasi ‘bersaing antara satu sama lain‘ dalam menwarkan harga runcit di station petrol.
“Pengusaha stesyen minyak boleh menawarkan harga yang lebih rendah dari harga siling, yang mana boleh dilihat diamalkan di negara maju lain. Dengan cara ini, ia membolehkan satu persaingan di antara penguasaha minyak, selain memberi banyak pilihan kepada pengguna,” kata beliau.
Malah, Dzulkefly berkata langkah tersebut dilihat tidak menyalahi undang-undang dan boleh diamalkan di negara ini.
By Assif Shameen / The Edge Financial Daily | December 2, 2014 : 10:05 AM MYT
SINGAPORE: As crude oil prices continue to fall in the global markets there is mounting concern that low oil prices could put a spanner in the works of Malaysia’s already fragile growth story, its budget deficit and its currency, the ringgit.
Oil industry analysts now expect the benchmark West Texas Intermediate could test and break below US$60 (RM206) per barrel level before Christmas, and Brent crude could be hovering between US$60 and US$65 a barrel within next few weeks.
As the only net exporter of oil and gas in Asia, Malaysia appears most vulnerable say economists who have spoken to The Edge Singapore in recent days. “Whichever way you look at it, low oil prices are a huge bonanza for all of Asia, except Malaysia,” said Jehangir Aziz, chief emerging-Asia economist for JP Morgan in Singapore.
To be sure, falling oil prices hit Malaysia in several ways. “But you need to separate Malaysia’s deteriorating trade balance situation from its fiscal issues,” Euben Paracuelles, Southeast Asian economist for Nomura Holdings Inc in Singapore told The Edge Singapore.
Paracuelles noted that while Malaysia is now technically a net importer of refined oil products, if crude oil and gas are included, Malaysia remains a net exporter, indeed the only one in Asia.
Every US$10 drop in global oil prices translates into 0.2% decline in Malaysia’s trade balance, says the Nomura economist. Since oil prices are down over US$35 from their US$105 peak earlier this year, that’s 0.8% of the gross domestic product (GDP) decline in trade balance just on crude oil. “If you add in gas, petroleum products, and all other things you are probably looking at 1.2% or so GDP decline in trade balance,” he argues. A further fall in oil prices could take trade balance down even lower.
Petroliam Nasional Bhd (Petronas) group chief executive officer (CEO) Tan Sri Shamsul Azhar Abbas said over the weekend that if oil prices hover around US$75 per barrel, payments to the Malaysian government could be 37% lower next year at RM43 billion, with dividends of around RM17 billion, taxes of RM 17 billion and royalties at RM 9 billion. That is about RM25 billion (or 2.3% of GDP) lower than the projected payment this year of RM68 billion, with RM29 billion in dividends, RM26 billion taxes and at RM13 billion in royalties, said Chua Hak Bin, Southeast Asia economist for Bank of America Merrill Lynch in Singapore.
Chua noted that Petronas’ guidance for a RM25 billion fall in contributions to government coffers is larger than from the recent scrapping of fuel subsidies, which Chua estimates at aboutent coffers is RM18 billion (or 1.7% of GDP).
Petronas’ revenues were down 1.3% year-on-year to RM 80.4 billion in the third quarter ended Sept 30, while state oil giants net profits fell 12.3% to RM15 billion. Pertains management expects current fourth quarter earnings to be “considerably lower” due to a further decline in oil prices. Bank of America Merrill estimates that every US dollar change in oil price has a RM1 billon impact on pre-tax profit.
Chua argued that with oil prices in a free fall, the Malaysian government is now likely to miss its original 3% fiscal deficit target for next year.
“We now expect fiscal deficit to come in at about 3.8% of GDP in 2015, widening from 3.5% of GDP this year,” he wrote in a note on Dec 1.
“Savings from the recent scrapping of subsidies will be around 1.4% of the GDP,” said Paracuelles.
For his part, Chua said the government will miss its fiscal deficit target next year despite the scrapping of fuel subsidies that became effective yesterday. Oil-related revenue contributes close to 30% of annual government revenues.
Bank of America’s earlier calculations projected 0.5% of GDP hit to government revenues from a 10% fall in global oil prices. Global oil prices are currently 30% lower than US$100 a barrel assumed in the budget presented just six weeks ago. Analysts are forecasting that prices for benchmark Brent crude could drop below US$60 per barrel over the next few months. That implies a 2% of the GDP hit to the government revenues.
Lower oil prices are also likely to hurt investments as Petronas and other oil and gas companies rein in spendings while their profits are in a free fall. Bank of America Merrill Lynch is forecasting GDP growth to slow to 5% next year from 5.8% this year, in part due to slower investment growth as well as the implementation of 6% goods and services tax (GST) next April.
Petronas group CEO has said the state oil giant could cut capital expenditure (capex) by 15% to 20% next year. Petronas will not dish out new risk sharing contracts (RSC) unless oil prices climb above US$80 per barrel, he indicated recently. For projects that had not been awarded final investment decisions (FID) could also be impacted as it reins in investments. Total capex of Petronas group amounted to RM56.6 billion in 2013, of which RM19 billion was invested into exploration and production activities in Malaysia, to enhance local production as well as to develop new fields.
Falling oil prices could also hurt the ringgit.
Nomura’s Paracuelles said he has had a very cautious view of the Malaysian currency in recent months. “As a lot of foreign investors have exposure to the ringgit, and overseas investors make more than 50% of the total bond holders, I believe Malaysian policymakers will tread very carefully,” he said. “In an environment where the US Federal Reserve (Fed) is looking to normalise interest rates and the US dollar is strengthening, things could be bad for flows that are interest-rate sensitive,” the Nomura economist said. “Falling oil prices mean Malaysia’s current account surplus narrows further, and therefore there is a smaller buffer to counter capital outflows particularly if the Fed moves earlier than anticipated.”
Weaker yen and quantitative easing in Japan are also playing major roles in Malaysia because Japan is a big importer of Malaysian commodities as well as other goods. Weaker yen makes it more expensive for Japan to buy those goods so there would be more pressure on the ringgit,” he argued.
Nomura is keeping GDP growth target around 5% for 2015 though Paracuelles said the risks are to the downside. “There is also the issue of slowdown in China, and a generally weaker global economy, and as a fairly open, export-oriented economy Malaysia is more vulnerable than many of its counterparts.”
Assif Shameen is contributing editor at The Edge Singapore
Oil’s decline is proving to be the worst since the collapse of the financial system in 2008 and threatening to have the same global impact of falling prices three decades ago that led to the Mexican debt crisis and the end of the Soviet Union.
Russia, the world’s largest producer, can no longer rely on the same oil revenues to rescue an economy suffering from European and U.S. sanctions. Iran, also reeling from similar sanctions, will need to reduce subsidies that have partly insulated its growing population. Nigeria, fighting an Islamic insurgency, and Venezuela, crippled by failing political and economic policies, also rank among the biggest losers from the decision by the Organization of Petroleum Exporting Countries last week to let the force of the market determine what some experts say will be the first free-fall in decades.
“This is a big shock in Caracas, it’s a shock in Tehran, it’s a shock in Abuja,” Daniel Yergin, vice chairman of Englewood, Colorado-based consultant IHS Inc. and author of a Pulitzer Prize-winning history of oil, told Bloomberg Radio. “There’s a change in psychology. There’s going to be a higher degree of uncertainty.”
A world already unsettled by Russian-inspired insurrection in Ukraine to the onslaught of Islamic State in the Middle East is about be roiled further as crude prices plunge. Global energy markets have been upended by an unprecedented North American oil boom brought on by hydraulic fracturing, the process of blasting shale rocks to release oil and gas.
Few expected the extent or speed of the U.S. oil resurgence. As wildcatters unlocked new energy supplies, some oil exporters abroad failed to invest in diversifying their economies. Coddled by years of $100 crude, governments instead spent that windfall subsidizing everything from 5 cents-per-gallon gasoline to cheap housing that kept a growing population of underemployed citizens content.
“If the governments aren’t able to spend to keep the kids off the streets they will go back to the streets, and we could start to see political disruption and upheaval,” said Paul Stevens, distinguished fellow for energy, environment and resources at Chatham House in London, a U.K. policy group. “The majority of members of OPEC need well over $100 a barrel to balance their budgets. If they start cutting expenditure, this is likely to cause problems.”
Costs as Benchmark
Oil has dropped 38 percent this year and, in theory, production can continue to flow until prices fall below the day-to-day costs at existing wells. Stevens said some U.S. shale producers may break even at $40 a barrel or less. The International Energy Agency estimates most drilling in the Bakken formation — the shale producers that OPEC seeks to drive out of business — return cash at $42 a barrel.
Canadian Natural Resources Ltd. Chairman Murray Edwards said crude may sink as low as $30 a barrel before rebounding to stabilize at $70 to $75 a barrel, the Financial Post reported.
“Right now we’re seeing a price shock coming out of the meeting and it will be a couple of weeks until we see where the price really falls,” said Yergin. Officials “have to figure out where the new price range is, and that’s the drama that’s going to play out in the weeks ahead.”
Brent crude was down $1.40 at $68.75 as of 9:14 a.m. in London, while New York oil lost $1.47 to $64.68. Brent is now at its lowest since the financial crisis — when it bottomed around $36.
Not All Suffer
To be sure, not all oil producers are suffering. The International Monetary Fund in October assessed the oil price different governments needed to balance their budgets. At one end were Kuwait, Qatar and the United Arab Emirates, which can break even with oil at about $70 a barrel. At the other extreme: Iran needs $136, and Venezuela and Nigeria $120. Russia can manage at $101 a barrel, the IMF said.
“Saudi Arabia, U.A.E. and Qatar can live with relatively lower oil prices for a while, but this isn’t the case for Iran, Iraq, Nigeria, Venezuela, Algeria and Angola,” said Marie-Claire Aoun, director of the energy center at the French Institute for International Relations in Paris. “Strong demographic pressure is feeding their energy and budgetary requirements. The price of crude is paramount for their economies because they have failed to diversify.”
Brent crude is poised for the biggest annual decline since 2008 after OPEC last week rejected calls for production cuts that would address a global glut.
Like this year’s decline, oil’s crash in the 1980s was brought on by a Saudi-led decision to defend its market share, sending crude to about $12 a barrel.
“Russia in particular seems vulnerable,” said Allan von Mehren, chief analyst at Danske Banke A/S in Copenhagen. “A big decline in the oil price in 1997-98 was one factor causing pressure that eventually led to Russian default in August 1998.”
VTB Group, Russia’s second-largest bank, OAO Gazprombank, its third-largest lender, and Russian Agricultural Bank are already seeking government aid to replenish capital after sanctions cut them off from international financial markets. Now with sputtering economic growth, they also face a rise in bad loans.
Oil and gas provide 68 percent of Russia’s exports and 50 percent of its federal budget. Russia has already lost almost $90 billion of its currency reserves this year, equal to 4.5 percent of its economy, as it tried to prevent the ruble from tumbling after Western countries imposed sanctions to punish Russian meddling in Ukraine. The ruble is down 35 percent against the dollar since June.
This Will Pass
While the country’s economy minister and some oil executives have warned of tough times ahead, President Vladimir Putin is sanguine, suggesting falling oil won’t force him to meet Western demands that he curb his country’s interference in Ukraine.
“Winter is coming and I am sure the market will come into balance again in the first quarter or toward the middle of next year,” he said Nov. 28 in Sochi.
Even before the price tumble, Iran’s oil exports were already crumbling because of sanctions imposed over its nuclear program. Production is at a 20-year low, exports have fallen by half since early 2012 to 1 million barrels a day, and the rial has plummeted 80 percent on the black market, says the IMF.
Lower oil may increase the pain on Iran’s population, though it may be insufficient to push its leaders to accept an end to the nuclear program, which they insist is peaceful.
“The oil price decline is not a game changer for Iran,” said Suzanne Maloney, senior fellow at the Brookings Institution, a Washington-based research organization, who specializes on Iran. “The Iranians were already losing so many billions of dollars because of the sanctions that the oil price decline is just icing on the cake.”
While oil’s decline wrenches oil-rich nations that squandered the profits from recent high prices, the world economy overall may benefit. The Organization for Economic Cooperation and Development estimates a $20 drop in price adds 0.4 percentage point to growth of its members after two years. By knocking down inflation by 0.5 point over the same period, cheaper oil could also persuade central banks to either keep interest rates low or even add stimulus.
Energy accounts for 10 percent to 12 percent of consumer spending in European countries such as France and Germany, HSBC Holdings Plc said.
As developed oil-importing nations benefit, some of the world’s poorest suffer. Nigeria’s authorities, which rely on oil for 75 percent of government revenue, have tightened monetary policy, devalued the naira and plan to cut public spending by 6 percent next year. Oil and gas account for 35 percent of Nigeria’s economic output and 90 percent of its exports, according to OPEC.
“The current drop in oil prices poses stark challenges for Nigeria’s external and fiscal accounts and puts heavy pressure on the exchange rate,” Oliver Masetti, an economist at Deutsche Bank AG, said in a report this month. “If oil prices remain at their current lows, Nigeria will face tough choices.”
Even before oil’s rout, Venezuela was teetering.
The nation is running a budget deficit of 16 percent of gross domestic product, partly because much of its declining oil production is sold domestically at subsidized prices. Oil is 95 percent of exports and 25 percent of GDP, OPEC says.
“Venezuela already qualifies for fiscal chaos,” Yergin said.
The country was paralyzed by deadly riots earlier this year after police repressed protests about spiraling inflation, shortages of consumer goods and worsening crime.
“The dire state of the economy is likely to trigger renewed social unrest, while it seems that the government is running out of hard currency,” Capital Economics, a London research firm, wrote in a Nov. 28 report.
Declining oil may force the government to take steps to avoid a default including devaluing the currency, cutting imports, raising domestic energy prices and cutting subsidies shipments to poorer countries in the region, according to Francisco Rodriguez, an economist at Bank of America Merrill Lynch.
“Though all these entail difficult choices, default is not an appealing alternative,” he said. “Were Venezuela to default, bondholders would almost surely move to attach the country’s refineries and oil shipments abroad.”
In an address on state television Nov. 28, President Nicolas Maduro said Venezuela would maintain social spending while pledging to form a commission to identify unnecessary spending to cut. He also said he was sending the economy minister to China to discuss development projects.
Mexico shows how an oil nation can build new industries and avoid relying on one commodity. Falling crude demand and prices in the early 1980s helped send the nation into a debt crisis.
Oil’s share of Mexico’s exports fell to 13 percent in 2013 from 38 percent in 1990, even as total exports more than quadrupled. Electronics and cars now account for a greater share of the country’s shipments. Though oil still accounts for 32 percent of government revenue, the Mexican government has based its 2015 budget on an average price of $79 a barrel.
Related reading: Oil Seen in New Era as OPEC Won’t Yield to U.S. Shale Oil Bust of 1986 Reminds U.S. Drillers of Price War Risk OPEC Refusal Means Oil Industry’s Weakest Producers Left Behind
Umno deputy president Tan Sri Muhyiddin Yassin says the party must change or be changed. – The Malaysian Insider file pic, November 22, 2014.
After winning the past two general elections by the skin of its teeth, Umno deputy president Tan Sri Muhyiddin Yassin has issued a stern warning to the ruling Malay party: change, or be changed.
He said Umno was in a critical state following the ruling coalition’s unprecedented loss of its two-thirds majority in the 2008 polls and its failure to fare any better in last year’s election.
“I am saying we have reached a rather critical stage, if no change or renewal appears to be happening, the concern is that we will lose.
“The sign is clear in front of us,” Muhyiddin was quoted as saying in Utusan Malaysia today, ahead of Umno’s annual general assembly next week.
The deputy prime minister said Umno had yet to recover from the beating it has suffered since 2008, adding that the party was still plagued by internal strife.
“There are still internal issues which have not been resolved, there are still fights for positions, money politics, carelessness, negligence and forgetfulness, and this includes the party’s wings,” said Muhyiddin.
“We have to self-reflect and admit to this, but we must also take firmer, braver and more effective action,” he said.
Taking aim at the party’s wings, Muhyiddin urged them to step up and do more in handling any issues raised by society, and to play their role in raising awareness among the people.
“No one should consider (Umno) Youth, Wanita or Puteri to have faded, become weakened, or to have kept silent all this while. There are many comments that (the wings) are no longer like the days of old, when they used to come forward if any issue was raised.
“Now they are not seen that way, this (situation) has been going on for quite some time, it cannot go on.
“To me, if we want to change, we must change. Otherwise, we will be changed,” he said.
Muhyiddin said the party wings’ leaders must be clear about the issues Umno championed, but added that they should adopt different approaches in their fight to uphold the interests of the Malays.
“When we use language, isn’t there a way to convey our message clearly without offending others?
“It is important that we never forget Umno’s rise and growth was to champion the race, religion and country. That has never changed. Our methods may be a little different but the message is the same,” he said.
Umno’s 65th annual general assembly will begin next week at the Putra World Trade Centre (PWTC) in Kuala Lumpur.
Umno secretary-general Datuk Seri Tengku Adnan Tengku Mansor has reminded delegates not to touch on sensitive issues during the five-day assembly.