Oil price will not fall below US$40 a barrel: Minister

Kuala Lumpur: Deputy Finance Minister Datuk Ahmad Maslan has expressed his confidence that the crude oil price will not fall below US$40 a barrel this year. He said instead, it would not exceed the crude oil price assumption of US$55 a barrel used by the government in the 2015 Budget revision as announced recently.

"If the price of oil were to fall below US$40 a barrel, oil companies will not be able to produce oil because the cost will be higher than the revenue.

"I am confident that the Organisation of the Petroleum Exporting Countries (OPEC) will also not allow the price to fall below that level," he said after an interview on the 'Dalam Radar' programme over Radio24.

Ahmad also commented on a positive outlook of the oil price in the second half of this year as espoused by International Trade and Industry Minister Datuk Seri Mustapa Mohamed.

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Mustapa, who attended the World Economic Forum annual meeting recently, said that world leaders concurred that the oil price slump was temporary and would rebound in the second half of this year to between US$60-US$70 a barrel.

Thus, Ahmad said he was confident that the government's assumption of the oil price in the 2015 Budget revision was accurate as it was even lower that of the international forecast.

Meanwhile, Ahmad said the 1Malaysia People's Aid scheme was aimed not only at helping the low-income group.

"It also helps boost local economic activities and ensure the continuity of the domestic economic cycle from factories to consumers.

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"The RM1 spent to buy a bottle of mineral bottle will help the bottlers, label makers, companies producing the mineral water and the sellers," he said.

He said many people did not see its importance to the economy and instead criticised the scheme as a wasteful expenditure by the government. – Bernama

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