Petrol Price

I'm tired of the government using the term petrol subsidy. I don't think we are really being "subsidized". So, I am going to find out what is the actual production cost for 1 litre of petrol. I was not able to find a nice chart. Therefore, I have to do some calculation.

Some basics: 1 barrel = 42 gallons = 159 litres.

1 barrel of crude oil generally produces 19.5 gallon of petrol. At USD70 per barrel, this is equivalent to USD0.44 per litre. The following table shows the price per litre for crude oil price of USD20-140.

USD	Per litre (USD)	@ MYR3.10	@ MYR3.30	@ MYR3.50
20	0.13	0.39	0.42	0.44
25	0.16	0.49	0.52	0.55
30	0.19	0.59	0.62	0.66
35	0.22	0.68	0.73	0.77
40	0.25	0.78	0.83	0.88
45	0.28	0.88	0.93	0.99
50	0.31	0.98	1.04	1.10
55	0.35	1.07	1.14	1.21
60	0.38	1.17	1.25	1.32
65	0.41	1.27	1.35	1.43
70	0.44	1.37	1.45	1.54
75	0.47	1.46	1.56	1.65
80	0.50	1.56	1.66	1.76
85	0.53	1.66	1.76	1.87
90	0.57	1.76	1.87	1.98
95	0.60	1.85	1.97	2.09
100	0.63	1.95	2.08	2.20
105	0.66	2.05	2.18	2.31
110	0.69	2.15	2.28	2.42
115	0.72	2.24	2.39	2.53
120	0.75	2.34	2.49	2.64
125	0.79	2.44	2.60	2.75
130	0.82	2.54	2.70	2.86
135	0.85	2.63	2.80	2.97
140	0.88	2.73	2.91	3.08

Of course we need to add in the operating cost and transportation cost. I will ignore the transportation cost since I don't have any data. I found a chart for operating cost for US refinery here. Let's take an average of USD8 per barrel. Adding this data, I get the following table:

USD	Op Cost/b	Per litre (USD)	@ MYR3.10	@ MYR3.30	@ MYR3.50
20	8	0.18	0.55	0.58	0.62
25	8	0.21	0.64	0.69	0.73
30	8	0.24	0.74	0.79	0.84
35	8	0.27	0.84	0.89	0.95
40	8	0.30	0.94	1.00	1.06
45	8	0.33	1.03	1.10	1.17
50	8	0.36	1.13	1.20	1.28
55	8	0.40	1.23	1.31	1.39
60	8	0.43	1.33	1.41	1.50
65	8	0.46	1.42	1.52	1.61
70	8	0.49	1.52	1.62	1.72
75	8	0.52	1.62	1.72	1.83
80	8	0.55	1.72	1.83	1.94
85	8	0.59	1.81	1.93	2.05
90	8	0.62	1.91	2.03	2.16
95	8	0.65	2.01	2.14	2.27
100	8	0.68	2.11	2.24	2.38
105	8	0.71	2.20	2.35	2.49
110	8	0.74	2.30	2.45	2.60
115	8	0.77	2.40	2.55	2.71
120	8	0.81	2.50	2.66	2.82
125	8	0.84	2.59	2.76	2.93
130	8	0.87	2.69	2.86	3.04
135	8	0.90	2.79	2.97	3.15
140	8	0.93	2.89	3.07	3.26

So, based on my estimates, we can see that at the exchange rate of USDMYR= 3.30, the government is just breaking even if the crude oil price at USD70.00 (since the petrol station and the refiner need to make a profit, we need to add this to the final selling price). Therefore, at present petrol price, if the crude oil is below USD70.00, then, you are paying "petrol tax" to the government. If the crude oil is above USD70.00, then the government is "subsidizing" you.

This is only an estimate. It is best that the government be transparent and publishes the daily wholesale petrol price, the tax/subsidy etc. The people need more information, we just don't trust the government word without further proof and evidence.