I hope our Prime Minister Anwar Ibrahim and all politicians will read this article so that they can take appropriate action. Malaysia must sell more oil before its price dropped further.

Crude oil is produced worldwide from various locations, such as tradition oil wells, deep-sea (ocean) wells, oil shale fracturing, and Canadian tar sands. The cost to produce a barrel varies from about $20 per barrel in Saudi Arabia's desserts to $90 per barrel for some deep-water wells.

Malaysia can produce one barrel of crude oil for about US$50 or Rm 207.

The Organization of the Petroleum Exporting Countries is called OPEC. Its objective is to co-ordinate and unify petroleum policies among Member Countries, in order to secure fair and stable prices for petroleum producers. Despite the oil price controlled by OPEC, oil price is dropping as shown below.

The current price of WTI crude oil as of June 14, 2024 is $78.49 per barrel. Malaysia is a small oil producer and it is not a member of OPEC.The fastest growing export markets for Crude Petroleum of Malaysia between 2021 and 2022 were Australia ($2.22B), Thailand ($ 197B), China ($1.95B) and India ($ 1.25B).

Since oil price is dropping so rapidly, Malaysia must increase oil production for export to earn more money to improve our economy.

What causes oil price to drop so rapidly?

The production cost for renewable energy is dropping rapidly as shown below.

Global dependence on oil, natural gas and coal–and the damage this dependence inflicts–is well documented. Renewables can effectively replace fossil fuels, creatingcrucial environmental, social and economic benefits.

Solar panel price has been dropping in the last 30 years as shown below:

About 1 month ago, my next door neighbor who has 4 children and they all sleep with air-conditioners. His monthly electricity bill is more than Rm 800 or yearly about Rm 10,000. He installed a few solar panels on the top of his roof for Rm 34,000 which can generate more electricity than his family required during the day. He can sell the excess electricity to LLN and buys back electricity from LLN duringthe night. He can recover his Rm 34,000 in 3.5 years. But the solar panels can last about 30 years.

Malaysia has shown a strong commitment to promoting solar energy development since the introduction of the National Renewable Energy Policy in 2010. This commitment has proven fruitful by the significant rise in operational solar PV installations over the last 13 years.

Malaysia has huge potential to harness energy from the sun because the country is located at the Equator and receives six hours of sunlight on average daily. 

A series of government initiatives, combined with the falling price of solar panels and increased awareness among Malaysians on the benefits of solar energy in reducing their electricity bills and carbon footprint, have also played a role.44

Since 2011, energy generated by all the solar installations in Malaysia surged 1,000 times from two megawatts (MW) to approximately 2657.15MW in August 2023. Several government initiatives have helped.

The Feed-in Tariff (FiT) which kicked off in 2011 and allowed solar PV owners to sell the electricity they generated to the national grid at a fixed price led to a rapid increase in solar panel installations.

Such was the programme’s success the government was forced to reduce the feed- in rates in 2016 due to ballooning costs. Still, the programme contributed 321.56MW of solar PV installed capacity as of August.

The Net Metering (NEM) Scheme was introduced in November 2016 where users would first use the power generated for their own consumption and sell any excess power to the national grid at a displaced cost.

The scheme was altered in 2019 to include an offset, whereby every 1kWh exported to the grid by the solar PV owner was offset against 1kWh of electricity an owner consumed from the grid.

As of August 2023, the NEM scheme generated 843.47MW of solar PV installed capacity.

It’s not only domestic consumers who have rushed to take up solar power. 

The Large Scale Solar programme, launched in 2017, encouraged local and international businesses to develop big solar projects which could generate and sell electricity to wholesale buyers.

A total of 1492.12MW of installed capacity has been in operation from the four cycles of the LSS programme as of August 2023. A further 949.09MW of solar PV capacity has been awarded under the programme but is yet to be operational.