DIESEL AT RM4.90 PER LITER

 

Diesel fuel is selling at RM4.90 per liter at the pump. It is going to send prices of everything up again. The whole world is delivered by trucks and lorries that run on diesel. All construction machinery and heavy equipment run on diesel. Construction costs are going to go up as well. 

Oil price is at US$91.84 per barrel (WTI today's price in the US). Despite the Iran situation. The in-the-know people say the war plan covers SIX WEEKS and today is the 24th day of the war - four days shy of four weeks. The next two weeks will be the closing phases. 

The regime in Iran is now being run almost completely by remnants of the IRGC leadership. The latest scare yesterday was the two missiles fired by the IRGC at the American military base at Diego Garcia in the Indian Ocean. It created a scare because Diego Garcia is 4,000 km distant from Iran. Implying that the IRGC has developed 4,000 km range ballistic missiles - enough range to hit Finland. 

However both missiles splashed into the sea, at some distance from Diego Garcia. This implies that the missiles did not have sufficient range. It was psy war to trick people into believing that indeed they did have long range missiles. Thus increasing pressure on the western media to push for de-escalation. The trick seems to have worked because the legacy press has been playing up the "threat to Europe" angle. 

Oil prices moved up a little. Lets see what happens tomorrow.

Some countries are facing serious economic problems - even without any help from the Iran situation. Pakistan closed its schools for two weeks. Offices and businesses in Pakistan have been told to work for FOUR DAYS only - to save on fuel consumption by the economy.   Pakistan does not have foreign exchange reserves (US Dollars) to pay for a higher oil import bill.  Plus they do not export much to accumulate foreign exchange reserves in the first place.

Indonesia is having problems too. The Indon rupiah is still crashing. It is now at 16,975 Rupiah to one US Dollar.

Here is the 5 Year chart for the Indon Rupiah vs USD. You can see it is doomed.

The Ringgit seems to be holding steady at around RM3.93 to the US Dollar. I hope it strengthens further. It will certainly help reduce price inflation of imported goods. 

The private sector economy must be grown even more to totally eclipse the goverment sector. It will help to strengthen the Ringgit even more.  

The views expressed are those of the writer and do not necessarily reflect those of MMKtT.