The slump in the price of crude oil: a call to review Malaysian revenue law and fiscal policies

• Main Authors: Hingun, Mohsin, Olaitan Sarafadeen, Nafiu, Petseteye Christiane, Tedongmo
• Format: Article
• Language: English
• Published: UPM Press 2015
• Subjects: K Law (General); KPG Malaysia
• Online Access: http://irep.iium.edu.my/49223/1/49223_The_Slump_in_the_Price_of_Crude_Oil.pdf; http://irep.iium.edu.my/49223/; http://www.pertanika.upm.edu.my/Pertanika%20PAPERS/JSSH%20Vol.%2023%20(S)%20Nov.%202015/01%20JSSH%20Vol%2023%20(S)%20Nov%202015_pg1-12.pdf
• Institution: Universiti Islam Antarabangsa Malaysia

Global oil prices have fallen sharply, leading to significant revenue shortfalls in many energy exporting nations. It should be recalled that from 2010 until mid-2014, world oil prices had been fairly stable, at around $110 a barrel. But since June last year, prices have more than halved. The questions that are being raised by some stakeholders centre on the reason for the falling price of oil. This paper looks at the potential long term solutions in a climate of persisting lower oil prices. The objectives of this paper are to draw attention to the implications of the plunging oil prices in the way that it affects Malaysia particularly, to show how Malaysia's reliance on oil exports could become a drag on its economy, to analyse implications policymakers should address on the impact of lesser oil revenues on the economy and to focus on the remedial measures potentially available to them through appropriate legal mechanisms, particularly tapping alternative sources of revenue. The methodology includes an examination of the laws and policies relating to income and expenditures and a consideration of mechanisms employed by other countries in raising revenue which are of relevance to Malaysia.