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the big debate..

it would be a crime to miss the big debate tonight. hehe. i for one will be watching it. although one can already guess la the points that will come out.

there are some points that need to be clarified. the topic of the debate is clear. hari ini membentuk kerajaan. esok turun harga minyak. what price are we talking about? petrol pumps? international crude oil prices?

can it be done? yes. but can it be done a day after one takes office? probably not. for starters, the transmission mechanism must be in place for any changes to filter down from a government ruling to the dealer at the pump. agreements between dealers and the oil company on who would bear the cost of the reduction. is it just a matter of increasing the government subsidies? or is it an erosion of profit from the oil companies perspective?

would the reduction be permanent? or is it just temporary? until it reaches a point where it is no longer sustainable and then will they just simply increase the price again? if they reduce the price today, and increase it again tomorrow? does that mean that they are still true to their word? because the promises does not say anything about KEEPING THE PRICE LOW.

and then how LOW is LOW? how do you decide?

unless DSAI has a secret formula to some fancy high tech fusion technology, the most likely method to reduce the oil price would definitely have something to do with PETRONAS' profits. so the new government would probably impose a higher dividend payment from petronas, and this amount would be used to offset any price reduction. in essence, they are going to use whatever amount they receive to pay for these subsidies. it's the government's prerogative. the profits they get from PETRONAS can be used to pay for whatever the government decides. they could invest on infrastructure and what not. or they could just use it for subsidies. in essence, PETRONAS would be supporting the other oil companies as well!! because the government still have to compensate the other oil companies for the reduction of their income.

that's where the question lies. if this is the preferred method then, why would the government use our national company's money to pay off other foreign multinationals?

unless the method that they would propose is to just cap the price and tell the oil companies to just sod off and just suck it. force the oil companies to accept the reduction. make it a mandatory requirement. if the oil companies are not willing to accept these terms then they could just sod off and get out of the country. renationalize all oil and gas upstream and downstream assets.

hehe waah. what would be the implication of that?

apart from being shunned by the international community, and possibly being taken to court for various breaches of whatever - it would probably still be okay for us la. we get cheaper oil.

in my opinion, we can try to reduce oil price by going back to basics. we need to manage the demand since we can't really influence the supply of oil. using prices to try to manage demand is one thing, but it doesn't really look into the fundamentals that drives demand up. consider this, people have been complaining about how our public transport system sucks balls. most frustrated people would rather be stuck in massive jams in their own car than be stuck in sardine can packed lrts. if you can persuade the thousands of drivers to use public transport - how much reduction would that make on fuel consumption and usage? or maybe if you improve on the roads to eliminate congestion, folks won't waste fuel stuck in jams.

you can be more firm also. governments can impose demand reduction methods to slowly reduce consumption. you can have driving bans according to number plates. alternate days for odd and even number plates. you can impose a charge to enter city centers. u can implement mandatory park and rides system. u can do a bunch of things. but to ensure the success of these drastic measure, u must provide a viable alternative. hehe i should throw in riding a bicycle in there somewhere la kan just for good measure.

so what can you expect from the debate? would the opposition be sharing their proposal with the government? or would they just tell us that they have the plan but we must vote them first if we want to see it?

i guess we just have to wait and see..

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