$77.70 PER BARREL

The current crude oil price is $77.70 per barrel (20:53 PM EDT - 2008.10.11). How much longer and how many more excuses can the government give? It is brilliant that they come out with so many excuses when they are not reducing the price but easily point to the crude oil price when it increases. Go up very easy, go down very difficult.

Two factors can bring pump price to RM1.92.

JOHOR BAHRU: There is a possibility that the price of petrol would revert to the old price of RM1.92 a litre which motorists had enjoyed before the price hike in June. Domestic Trade and Consumers Affairs Minister Datuk Shahrir Abdul Samad said this would be possible if world crude oil price continued to dip to below US$72 (RM252) a barrel.

He said after the petrol price hike in June, the government had fixed the subsidy at 30 sen per litre, providing a simple mechanism to decide on future pump prices.

"With a fixed subsidy, the retail price of petrol would reflect changes in the crude oil price," he said at the reopening of YKK (Malaysia) Sdn Bhd factory in Larkin Industrial Area after the completion of a renovation exercise.

Shahrir said another factor which would have to be considered was the exchange rate of the ringgit versus major world currencies.

"If the exchange rate remains and the price of crude oil tumbles, then it is inevitable that the retail price of petrol will also follow suit."

Shahrir said theoretically if the price of crude oil went as low as US$72 a barrel, the price of petrol would be RM1.92, which was the old price before the 78 sen hike in June.

"Right now the crude oil price hovers around US$88 a barrel, thus a decision will be made at the end of the month by the cabinet for any possible price reduction at the pump," he said.

Asked about the impact from the recent petrol price reduction by 10 sen, Shahrir said it might not have been reflected by the prices of other items as there were many other factors involved in determining the prices of goods, such as foreign exchange.

"For some essential items that we produce domestically like cooking oil, the government is giving out subsidies to the manufacturers and for other items, the government will try to minimise the cost of transportation by giving fuel subsidies," he said.

Shahrir cited the effort by the government to bring in 600,000 coconuts from Indonesia during the festive season as an example of its proactive approach to keep prices stable.

"However, we could not control the price of coconut milk as there was no means to determine the thickness, thus only the price of grated coconut could be controlled."