Tuesday, March 15, 2011

To the Peope of Japan - Our Thoughts and Prayers are with You

We wish you strength and resilience in over coming this great tragedy. God be with you.

Japan earthquake: £100bn bill for costliest disaster in world history

The Telegraph - 15 March 2011

The tsunami is expected to be the world’s most expensive natural disaster, with predictions that the repair bill will top £100 billion.

Japanese rescuers search for the victims of Friday's tsunami in Miyako Photo: AP

Hurricane Katrina holds the record, having caused damage estimated at £77  billion to the Gulf Coast of America in 2005.
But the company Credit Suisse predicted yesterday that the total cost of Friday’s earthquake and tsunami would be at least 14 trillion yen (£106  billion).
The disaster caused a 6.2 per cent drop in Japan’s Nikkei share index, wiping £90 billion off stocks and shares traded there. That in turn dragged share prices to a six-week low in many countries.
In Britain, the FTSE 100 index closed almost one per cent or £15 billion down, while the Dow Jones suffered a similar slump in early trading.
Andre Bakhos, the director of market analytics at Lek Securities in New York, said: “The earthquake could have great implications on the global economic front. If you shut down Japan, there could be a global recession.”
Other experts suggested that the tragedy would at least hinder worldwide recovery from the economic downturn.
The Bank of Japan responded by pumping a record £113 billion into the banking system to prop up confidence and meet demand for borrowing in the aftermath of the disaster. Japan was already struggling, with its national debt standing at twice national income and its economy shrinking in the last three months of 2010.
Dozens of factories were unable to open yesterday and many companies could not predict how long it would take to repair damage and restore supply lines.
Among the major businesses that could not operate factories were Toyota, Honda, Nissan, Canon, Nestle, Sony and Panasonic.

Friday, February 25, 2011

Malaysia Hopeful World Oil Price Will Stabilise Soon, Says Awang Adek

BACHOK, Feb 24 (Bernama) -- Malaysia hopes global oil market will stabilise soon so that the impact of the current volatile situation is not significantly felt in Malaysia.

Deputy Finance Minister Datuk Dr Awang Adek Hussin said it was the fervent hope of the international community that the political turmoil and civil unrest in several oil producing countries like Libya would come to an end soon.

"Oil price is very sensitive, the price can go up and come down based on certain indicators (like conflicts).

"If what is happening in certain countries like in Libya continues unabated, it will cause oil price to spiral," he told reporters after giving cash aid to fire victims of Ladang Kampung Kuau Besar/Beoh in Jelawat here Wednesday.

Fourteen people received RM3,000 each.

The latest report from Paris said one-fourth of the total crude oil production from Libya has been stopped following continued violent street demonstrations in that country, prompting oil companies to issue a warning that oil supply in the third largest oil producer in Africa would be disrupted.

Oil companies like Total, Repsol, Eni and BASF as well as OMV from Australia had warned that they would downsize or stop oil production in Libya.

This latest development will have a serious impllication on oil supply from Libya which produces high quality oil as much as 1.6 million barrels per day or two per cent of the total world oil production.

Responding to the heightened tension following widespread civil unrest and continuous street protests in Libya, Awak Adek said it was still premature to say Malaysia would be adversely affected by the political turmoil in that country.

"It is still too early for Malaysians to feel the impact here (Malaysia). Nonetheless, we hope the political conflict in Libya will not prolong as the crisis will also give a blemished image to Islamic nations worldwide," he said.

Two days ago, the government said it was examining several options not to raise petrol prices in the near future though several countries have raised fuel prices twice in three months following spiralling world oil prices.

Domestic Trade, Cooperatives and Consumerism Minister Datuk Seri Ismail Sabri Yaakob had said his ministry and the Finance Ministry were jointly studying other options to avoid an increase.


Wednesday, February 2, 2011

RON97 Petrol Price Rises By 10 Sen Per Litre Effective Midnight

January 31 2011

KUALA LUMPUR, Jan 31 (Bernama) -- The price of RON97 petrol will rise 10 sen to RM2.50 per litre effective midnight tonight, said the deputy president of the Petrol Dealers Association of Malaysia (PDAM) Datuk Zulkifli Mokti.

He said the increase was due to the rise in the price of crude oil to USD105.00 per drum this week compared with USD100.00 previously.

"The consumption of crude oil in the United States and Europe rose significantly due to the extremely cold weather there which had raised fear about the shortage of crude oil," he said when contacted by Bernama tonight.

Zulkifli said the price of world crude oil would drop again as soon as the summer season arrived in June and the petrol price would remain stable then.

On Jan 4, the price of RON97, which was floated according to the prevailing oil market price, rose 10 sen to RM2.40 per litre.


Monday, January 17, 2011

Economists doubt fuel prices can go lower

G Vinod | January 13, 2011
Even at RM1.90 per litre, Malaysia's fuel price is still considered the cheapest among oil-exporting countries.
PETALING JAYA: Several economists cast doubt over views presented by two academicians that Malaysia can lower its fuel prices to as low as 30 sen per litre.
Professor Hamid Yeop and economist Amir Hussin Baharuddin on Monday said that as a petroleum-producing nation, Malaysia rakes in higher profits due to the rise in oil prices.
They said most oil-producing nations fixed their domestic oil prices lower than the international market price, and Malaysia can also easily follow suit.
“A research in 2008 showed that while world fuel prices are determined by market forces, in Malaysia, prices are not adjusted accordingly and has never fallen,” they told a Malay daily.
Economist Yeah Kim Leng said the government has in fact moved to adjust domestic oil prices, citing the two separate schemes for RON95 and RON97 fuel.
“While the RON97 price is determined by the global oil market, the government is subsidising between 30 and 40 sen per litre for RON95,” said Yeah.
He added that currently, Malaysia’s RON 95, which is sold at RM1.90 per litre, is still ranked among the top 20 cheapest in the world.
“Countries that offer RON95 prices for less than a ringgit per litre are among the world’s top oil- producing countries with huge oil reserves.
“However, our oil reserve only stands at 0.3 % of the world’s oil reserves compared with 29% for Saudi Arabia.”
He said that Malaysia’s higher returns from soaring fuel prices are channelled into the oil and gas industries.
“The government, therefore, would still need to fork out money to subisidise its domestic oil prices,” said Yeah.
He agreed with the government’s recent subsidy rationalisation move, saying it would not only help the government to cut cost but also promote energy efficiency among consumers.
To alleviate the burden of the lower-income group due to the fuel price hikes, Yeah suggested that the government channel subsidies directly to this group.
“The government is working on a mechanism to help them. Currently, only the middle- and the higher-income groups are benefiting from the subsidies,”he said.
Market trend
Another economist, Cheong Kee Cheok, of Universiti Malaya, cast doubts on the two academicians’ research findings.
“The market price for petrol (unsubsidised) is made up of the cost of extraction and the cost of bringing what is extracted to the market as petrol.
“The extraction, refining and transport costs have to be added on even if oil companies do not make profits from doing all these. I hope the professors took into account all this in their research.”
He added that he was unconvinced by the argument that other oil-producing nations charge their consumers very low prices as justification for Malaysia to lower its domestic fuel prices.
“Take, the US, a major oil-exporting nation. It sells its domestically made cars cheapers than we do. Any economist must know that the point is how we manage our limited resources,” said Cheong.
Asian Strategy and Leadership Institute chairman, Ramon Navaratnam, said oil prices in Malaysia should move in tandem with the international market trend.
“It is basic supply and demand (situation). Malaysia has lower fuel prices due to its subsidies and the two experts cannot expect Petronas to sell fuel domestically at cost price if that was what they meant.
“In addition, you cannot increase subsidies anymore as the government needs to tackle its budget deficit which currently stands at nearly 6%.
“The best way to offset soaring petrol prices from affecting the lower-income group is to provide better infrastructure funding for the lower-income group,” said Ramon.
“The government should channel subsidies to provide better housing, healthcare, education and public transport.”

Wednesday, January 12, 2011

Petrol prices forcing parents to share school run

Nearly half of parents are thinking of sharing the school run in an attempt to cut down on the cost of running their cars, after petrol prices hit a fresh record.

The average price of a litre of unleaded petrol climbed higher on Tuesday from 127.80p to 127.88p, edging ever closer to the equivalent of £6 a gallon (132p a litre).
The price has climbed steadily since the New Year, when first fuel duty was increased, and then a few days later the increased level of VAT came into force.
Consumers have been cutting back on driving – as they did during the fuel price spike of 2008. According to a poll by Halfords, the retailer, 44 per cent of parents say they are talking to friends about sharing the school run.
The survey also suggested that 78 per cent plan to drive less, with daily short trips to local shops the biggest casualty of the attempt to save on transport costs.
Figures from HM Revenue and Customs suggest that fuel consumption falls when the price of petrol increases. During December 4.28 billion litres of fuel – either unleaded petrol or diesel – was released for consumption, a fall of 4.48 billion in November. - The Telegraph
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