Oil price hike

I was shocked to hear the Government of Malaysia has increased the petrol price from RM1.92 to RM2.70 and diesel by RM1. Plus, the price will be reviewed every month according to the world price of oil. On the other hand, the government-owned Petronas is making record profits up to RM70billion.

I am sure there will be more street demos in Malaysia!

I don't really think there is a significant shortage of world oil supply at the moment. I will put the blame on the speculators for speculating on the price of crude oil by assuming events that might not even occurred yet. War and natural disaster should contribute to the cut of the supplies but this might be exaggerated so that the Bush-led US Government should profit on the world price hike.

I am very sure the oil companies throughout the world will be making tonnes of profits for the years to come. Aviation companies and car manufacturers will suffer their worst performance... General Motors are famous for their part as gas-guzzling vehicles producers and shall also suffer their biggest sales slump.

I don't get it you know. I am not an economist. I am far good at economics. My only proud achievement with economics is getting exemption for subject CT7 (Economics). But who fix the price? Speculators right? Or is it really true that the supply of oil is vastly decreasing? I don't believe in something I don't see. What if the price of oil is simply an exagerration?

Whatever it is, the US economy is slowing down and so will be the rest of the world following the oil price hike and the credit crunch. Greedy hedge funds are also preying on these factors.

The question is, can Malaysia cope this time?