What does the below graph tells you...


Our net exports for petroleum is narrowing. At the same time oil prices if dropping to a new low recently in comparison to the last few years. If you have followed our own Malaysian story, we have been rather active on re-opening our marginal oil fields as when oil prices increases, the price of oil would have surpass costs of those older oil fields which were deemed to be too expensive to extract from.

Now that oil prices have started to take a hit, that profit margin is thinning. Malaysia have been largely dependent on oil produces, palm produces as the main revenue for the government. Hence, if oil is to have drop in price, it is actually not so good for us as government's income would be affected as taxes from petroleum could have been lower. That is quite similar for the crude and refined palm where we have scrapped taxes on those produces temporarily.

With that, what does one expect the government to do?