Besides the traditional " Not enough oil left in the world "reason , this is what i think that might have also contributed to the cause of high oil prices. ( Which, i might be wrong ) But, here goes. Enjoy.
First of all, we all know that USD is the most recognised currency in the world. And in the oil-trading market, it is no surprise why the USD is also being used. However, the US currency has been depreciating in this few years and this might just be one of the reasons why oil prices has been increasing dramaticly.
For example, in the past 1USD=RM3 and a barrel of petrol cost 1usd. Therefore our govt will pay 1usd which is equal to rm3. Now, 1USD=RM1.50. Thus, oil producer will have to increased the price level to 2usd to maitain rm3 per barrel to gain maximum profit.
Maybe in this case, Msians wont suffer that much since one barrel of petrol still cost the same, but for countries such as thailand which is not an oil exporting country will suffer badly.
Besides that, big time players who holds their cash in USD will start to realise that their assets in USD are dropping in value which make them look for other alternatives which can increase in value in the future, what else, but petrol. Therefore they will start pumping usd out which causes the depreciation but at the same time creating a demand pull for the oil prices ( Excessive demand over supply ).
Sigh,the global economic aint doing so well and the increased oil prices which will increase even more in the future will only cause more problems. Lets take a household for example. They originally earn 1000 a month but due to increased prices, their cost of living has gone up. What will the household do ? For starters they might wanna look for part time job, but what if Msia like US and the rest of the world falls into recession ? What will they do next ? What else, but to rob and steal out of desperation.
One might argue than how bout China ? Personally, i think China is growing so rapidly because of cheap labour and due to the olympic games. Once their labour cost starts to increase and the games are over, China would be just like any other Asean countries without anyother specialties to offer to the world.
Natural disasters, increase in oil prices, lack of food ,civil wars, corrupted governments,US economy falling apart. If you ask me, i would say its a perfect recipe for a World War 3 all right. * double gulp :/
1 comment:
i beg to differ dear friend,
PETRONAS is not fully owned by the govrnment. and yeah, no offence, but it is the wrong mentality that petronas has everything to do with why malaysians have to suffer to the price increase and not like them bruneians.
Yes, we have oil. Yes, our oils that are extracted are more exported than imported.
That is bcause the 'production' of oil in Malaysia itself cost much higher than importing other oils.
In this case, having oil extracted by Petronas cost much higher to to process and turn them into the ones we need for our daily usage. Usually among all the extraction of oils, a percentage is left to process here in Malaysia, and this whole result gives us in the form of Diesel, and the rest turns into a form of petrol that cant even be used by our vehicles in Malaysia! That is why we sell them to other countries, to gain profit, and to gain money to BUY oil from other countries that can be used here in Malaysia.
Its cheaper to import, so why not import oil and sell ours to make profit?
Mind you , the profit gained are used for SUBSIDIZATION in this country. So PETRONAS in short, contributes ALOT to the government, lets not forget too that petronas ALSO pays to the government in the form of duties,dividends, royalties, corporate tax, petroleum tax ( etc ) for our country's benefit. which then government uses the money to subsidize the rest of the country.Which then gives the country less burden on the impact of increasing oil price ( back then ), subsidization of govt projects like schools, roads etc etc.
You are right about the govt being corrupted, but no way Petronas has got anything to do with the price increase.
And the whole traditional 'not enough oil left in the world ' is not true my friend. There IS still enough oil in this world, but the process of extracting them in other potential spots are alot higher due to untrategical reasons and what not.
So yea, the whole currency part, does make sense, i guess its okay.
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