Monday, March 20, 2006

30 Sen Petrol Price Hike

I've been reading with avid interest the reactions to the 30 sen hike in petrol prices in Malaysia. I know that petrol prices in Malaysia have been heavily subsidised by the government for the longest time. The prices do not reflect the current market rates.

So Doug and I got to talking about the varying prices we have to pay for our gasoline every time we fill up our gas tanks. The last time (last week) I filled up my mini-van, I paid $2.29 per gallon. The price I see at the nearest gas station, for the last two days has shown $2.54 per gallon. See what a difference a week makes in the price of petrol here? And this is just where I live, elsewhere it is different - could be more, could be less.

In the UK, people pay a lot more for their petrol compared to other places in Europe, and compared to the US. In the UK there is a heavy tax on petrol. The reason for this high rate on petrol is to encourage conservation. People are forced to adjust their lifestyle ... drive smaller cars, take public transportation or car pool to work.

In the US the government has resisted putting too much taxes on the price of petrol. The taxes that are attached to the petrol prices are mostly towards building and maintaining roads. In California, the additional taxes are for producing cleaner fuel for vehicles, i.e., by adding additives that supposedly help keep the environment cleaner.

I remember, when the price of gasoline was over $3 per gallon. We drove less. We drove our smaller cars and kept our gas guzzlers in the garage.

In the oil rich Arab countries/states petrol prices are only a few cents a litre. When you pay less for a litre of petrol than a litre of bottled water, there is bound to be wastefulness. There is no incentive to conserve.

In Malaysia, every time, there is an increase in the price of petrol, prices of other necessities go up too. What I am most unhappy about is the rate of increase is never proportional to the increase in the petrol price. Every business person uses the excuse of the petrol price hike to up the prices of their products and services! Grrrr!

No wonder people are protesting the 30 sen price hike!


  1. I would not kbow how to put it in words. What is being done here is that when the Gment hike petrol prices,they tell people to change their lifestyle and use public transport and at the same time promote people to buy the national add salt to the wound, they encourage people to use public transport but do nothing to improve the service, then they warn the traders not to raise prices or face action, but the traders do raise thrier prices and the Ministry responsible keeps quiet.... I guess here we are a lip service Nation.

  2. I don't know if the gov't can do much abt public transportation other than provide for the commuter rail services in big cities or better roads. Buses and taxis are private enterprises so there is no gov't involvment there other than make the situation conducive and profitable for people to operate bus/taxi services (tax breaks etc)

    People will change their lifestyle when there are no other alternative for them. Americans like big cars - gas guzzlers, but when gas prices go up sharply, they drive smaller cars, travel less etc. Doug takes the van pool to work - only pays $30 a month compared to $30 a week he'll have to spend on gas if he drives himself to work.

    If market forces work, prices of oil go up and down, and traders cannot increase the prices of goods every time prices of oil go up just to keep up .. so they will have to maintain a stable price for their goods and services.

    I think Malaysians have been spoilt by the subsidy mentality, and they think they cannot survive without subsidies. I know it is hard for the poor, esp those who live so far in the interior and depend on diesal to run their outboard engines, and other machinery. I don't know how this problem can be solved but if the gov't subsidises the oil prices for a certain segment of the population and not others, there is bound to be smuggling and illegal selling of the subsidised item. Who of us, doesn't know that diesel smuggling is not rampant in Malaysia?!

    And the relevant authorities do need to crack down on the sharp increase in prices of other goods .. otherwise like you said, it is only lip service, and causes more hardship on the rakyat.

    About the national car ... err, if the price of the national cars wasn't so high, used cars would be a lot cheaper, and instead of buying brand new cars and spend all that money, people with limited income will buy the used cars. Used cars are so cheap here in the US .. and all the vehicles we own are used ones!!

  3. you really know what is the real reason why fuel prices is hike up? Its due to the stupidity of the government itself. Hell yeah! the most moron PM is in action. here i put some of the information which is lead to the prices hike. Hell knows that the prices is hike up when the world prices is declined. What the heck all of this? here is some of the information passed to me. Actually i want to post this info in my next coming blog...anywhere here is some government secret info...

    Pertama sekali abang Perdana Menteri kita ia itu Ibrahim bin Badawi menerusi syarikatnya SkyChef menjadi supplier makanan kepada syarikat penerbangan MAS yang sekarang mengalami kerugian RM900 juta untuk sembilan bulan pertama 2005. Abang PM kita jual sebotol air mineral kepada MAS dengan harga RM30 setiap botol. Kenapa kita hairan MAS rugi ?
    > Menteri Besar terengganu Idris Jusoh telah mengadakan lumba kapal layar Monsoon Cup yang menelan duit rakyat sebanyak RM300 juta.
    > Duit ini di bayar kepada seorang taukeh bernama Patrick Lim dan kekawannya termasuk Khairy Jamaludin menantu Perdana Menteri. Perlumbaan kapal layar tak sampai lima hari makan duit rakyat RM300.0 Juta. Sudah tentu duit RM300.0 Juta itu ditelan oleh orang yang sungguh bertuah dapat kontrak RM300.0 Juta itu.
    > Untuk menutup kehilangan duit sebesar ini sekarang sabsidi minyak di potong dan harga minyak nail 30 sen satu liter.
    > Telekom Malaysia pula rugi lebih RM700 juta duit rakyat sebab terpaksa bayar ganti rugi kepada syarikat telekom German ia itu Deutsche Telekom. Terpaksa bayar ganti rugi RM700 Juta sebab Telekom Malaysia tak tahu buat kontrak.
    > Nak tutup rugi ini pula kerajaan potong sabsidi minyak.
    > Sekarang lebih murah naik kapalterbang Air Asia pergi balik dari Kuala Lumpur ke Kuala Terengganu. Tambang pergi balik Air Asia dari Kuala Lumpur ke Kuala Terengganu tak sampai RM300 bagi tiga orang sekeluarga.
    Di Malaysia pula ada AP. Sebenarnya harga AP yang perlu di bayar kepada Kerajaan (MITI) tak sampai RM250 sahaja. Tapi AP boleh di jual sehingga RM40,000 sekeping kepada Dato Dato yang kaya ya ng di kenal sebagai "AP King". Rasuah AP ini telah berlanjutan selama lebih 30 tahun. Akhir kata rakyat Malaysia yang terpaksa tanggung rasuah AP ini.
    > Oleh yang demikian kereta Honda Civic 1.5 yang dijual dengan harga RM40,000 di Thailand naik harga sehingga RM110,000 di Malaysia. Rakyat Malaysia rugi. Kerajaan pun hilang wang. Bila kerajaan tak cukup wang - maka potonglah sabsidi minyak. Maka naik lah harga minyak 30 sen satu liter.>

  4. Guruh, there is no denying the existence of gross mismanagement and corruption in the running of MAS resulting in huge losses. The same with Talikom M'sia and whatever else govenment/quasi government entities.

    But the fact is the prices of petrol/petroleum products in Malaysia are kept artificially low through subsidies. Even with the 30 sen increase, the price is still the subsidised price, albeit, a reduced subsidy.

    I believe in free markets, and every time the government interferes with market forces, the results are not always, in the long run, desirable. Let supply and demand determine prices .. and government policy used with discretion.

  5. Puteri, i'm with you that let demand and supply determine the market price. i'm also believe in the free market or laissez-faire market. But at certain point when there is a government intervention, everything seems not right. Whether the government put the price ceiling,price floor or providing or dis-providing the subsidies, it still gives some effect. here the matters is why the govt' cut the subsidies at the time of world oil prices is declined?? yes i admit that Malaysian is a subsidised mentality which is bound to their roots. But how about the people who lives in the rural area such as at our place, Sarawak??? Those people are not bound to this mentality. Furthermore those people does not have fuel subsidised for a generation. Now with this sharp hike of fuel, it gives a very big impact to their daily lifes. If at west m'sia, there maybe some NGO will fight for them but it is in Swk...Lives in M'sia is not the same as lives in U.S. As for the others things, some few years ago, i heard there will be an abolishement on the sales and services tax, but now it just like a wind.The plan is just gone like that. Actually i does not how to put this in a word. But if the govt really want the people to change their lifestyle, it should be start from the PM himself, count down all the minister remuneration up to 50% and all minister should go to workplace or parliement using a public bus.Let them suffer exactly like what the people more thing do you ever take a ride in KL bus, the Rapid Kl Bus...? Do ou know that bus look like.? Hangus. semua bas rapid Kl udah kala angus peda aja bekau angus nya.......Sorry if any my word here is being too rude......


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