Why the removal of fuel subsidy despite a net-exporter nation?

Let’s not speculate nor be emotional, let’s analyze this rationally, the dummy 101 way. I do not have the figures on hand or off my head (and I doubt I can get real figures anyway), so I use simple formula to illustrate my case “Profits = Ex – Im – Sub”

Ex = Export of Malaysian Oils ($)
Im = Import of Foreign Oils ($)
Sub = Subsidies

There are many factors can affect the out-come of the “Profits”, for instances,

1) Management of selling price (Ex)
2) Output / Successful Exploration (Ex)
3) Management of buying price (Im)
4) Domestic Consumption (Im)
5) Inefficiency (Sub)

Note: (In case you don’t know, inefficiency is a nice way of saying small time and big time smugglings, and who knows how many more ways out there to abuse the subsidy system).

In the old days, the spread of retail price and import price was not so big, so still can party on lah. But now, Malaysians still enjoy relatively low retail prices, err... some Thais and Singaporeans also enjoying them; and not to mention the mega industrial consumers, while the spread of retail price and import price is getting bigger and bigger. It does not take a genius to figure out, the subsidy amount will get bigger and bigger until one day we will be making loss on the left side of the formula, if not already.

Ones can always argue we are a net-exporter what. Net my ass, net. Tell me is that a net barrel or net amount, and they really don’t matter. Net Barrel is eventually turned into amount which is greatly affected by the sample factors mentioned above. As for Net Amount, I have already explained.

I may sound and talk like an asshole for not standing by the side of most Malaysians (hoping and praying that the removal of subsidy was only a joke). That’s ok. And I have to tell you to stop denying the fact that we can no longer afford cheap fuels. So, think positively, come out good ideas to save fuels lah. Stop being a cry baby : gimme gimme subsidies. Kekekek.