“Dont bury your head in the sand!” Tapis crude oil price, like Brent, is also on the decline.
DAP National Political Education Director Liew Chin Tong has asked Deputy Finance Minister Chua Tee Yong and the BN government to confront the issue of fuel prices instead of “burying his head in the sand” – like the flightless bird; the ostrich.
Liew slammed Chua for a statement he made reported in The Star, where the latter had said that the falling global oil prices ‘might’ result in a positive impact on the country’s deficit.
In the past, Liew had warned that the country would suffer at least RM 650 million revenue losses for every USD $1 fall in oil prices, prompting his criticism of Chua’s subsequent dismissal of the looming fiscal crunch and a potential economic crisis.
“I am shocked at the lackadaisical attitude of Chua and the government in general towards the looming fiscal crunch and a potential economic crisis.”
“First, 30 percent of the government’s revenue comes from petroleum-related income and the lowering oil price will result in a larger fiscal deficits,” Liew said.
Chua had also said that Malaysia relied on Tapis Crude and not Brent Crude in determining oil prices and that the “the average pricing per barrel had met expectations so far”. The government budgeted oil prices at US$110 per barrel in 2014 and US$105 per barrel in 2015.
Tapis crude is a Malaysian crude oil used in Singapore as a pricing benchmark. Its price is generally higher than Brent due to its low sulphur content and overall higher quality of oil.
Opposition leaders have used the Brent Crude oil price to represent the dip in the global fuel price which is currently below USD 70 per barrel.
In the report, Chua said that the Tapis Crude oil has been above USD 100 (RM 344) between June to November – and that this met the government’s expectations. However, Liew said that this does in no way mean that it is stable.
“Chua’s argument about Tapis is stable and it is not Brent is just like a ostrich burying its heads in the sand.”
“Over the past four weeks until 3rd December 2014, the highest of Tapis was US$86 per barrel, and Brent and Tapis were both at the same price at US$ 71 per barrel,” said Liew, adding that Tapis is usually about five percent higher than Brent prices.
Although the price from June to November was as stated by Chua, Liew pointed out that for the past two months, Tapis has plunged below the US 100 mark.
“In fact, for most of the last two weeks, it was lower than US$ 80.”
He also took a swipe at the recent increase in the diesel price after the new managed float system was put in place.
“The government’s decision to raise diesel pump price by 3 sen is just adding salt to the wound, which is likely going to send consumer prices up further,” Liew said.
Ostriches are known to tunnel under ground with their heads to build nests for their eggs. While the animal does not literally “bury its head in the ground” the act of constantly placing their heads into holes in the ground to reposition their eggs is mistakenly perceived as such. -The Rocket
