Wednesday, March 14, 2007

Reduce oil price despite better quality

The Director-General of Department of Environment Datuk Rosnani Ibrahim tow days ago commented in News Straits Times that low-sulphur petrol and diesel with 0.05 percent of sulphur which comply with EURO II emissions standards will be available next month.

With lower sulphur content, it is believed that the fuel would become more environmental friendly. Rosnani also elaborated that oil companies should be able to absorb any extra cost in coming out with lower sulphur content fuel.

DAP welcomes the introduction of low-sulphur fuel in Malaysian market but would like to reiterate that until there is an alternative for motorists, either in the form of an improved and efficient public transportation system, lower oil price or introduction of alternative fuel like biofuel in the market, else the introduction of low-suphur fuel in Malaysian petrol kiosks will be less meaningful if it is not coupled with any of the three alternatives above, especially the latter two.

When the government decided to increase oil price by 30 sen on 28th February 2006, international crude oil price is only USD 60 a barrel. Although it has surged to more than USD 70 a barrel, international crude oil price later stabilized at price below USD 60 per barrel, a level which is lower the level it was when the government increased the price. At one time, it even dropped to close to USD 51 per barrel, raising much concern from motorists to demand the government to reduce oil price.

Government assurance in early January 2007 that there will be no price hike for petrol and gasoline is equally meaningless as the valid concern of motorists today is not about the government is going to increase the price or not, but of whether the government is ready to cut the price to reflect it’s actual level in international market as what the government justified when oil price was increased one year ago.

Although the introduction of B5 biodiesel (5 percent palm oil mixed with 95 percent diesel) is much lauded when it was launched in mid 2006, there has not been much improvement except that the production of biodiesel is mainly to serve foreign markets. Worst still when there are only five companies out of 90 companies are active biodiesel production companies.

This is not quite encouraging when the fuel has not been able to be marketed in domestic market to serve as alternative fuel for motorists. Is the government more interested to market the fuel in oversea markets rather than benefiting domestic motorists with more affordable and cleaner fuel?

The question is clearly not so much on the quality of the fuel we use but more on the right-to-choose we have as consumers and motorists.
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