Petrol oh Petrol!!

Last Wednesday night I left office at 930 pm and was looking forward to a cup of coffee to wind down at home. I was supposed to be on leave but was called to office for urgent matter and didn’t bargain for a massive traffic jam in the city that night. It took me a while to realized the cause of the traffic snarl once I approached the 2 petrol stations along Jalan Tun Razak. The petrol stations were grid locked with cars spilling onto the main road queuing for their turn to fill up. Only that afternoon a friend sms’ed me that petrol price will increase by 50 cents after 12 midnight. I thought then that I would fill up later since I have more time and need to rush to this meeting of mine. How wrong were I then, with cars at frenzy trying to fill up there’s no way I will want to join these crowds for the sake of saving a few Ringgit that night. I would if I can, but that night was terrible and I am better off at home catching up with my family, what with the school holidays. I have to eventually fill up with the new price later anyway, I cant beat the system for too long, what with all the traffic chaos and the long wait I kind of feel that it’s not worth it.

Finally the government has made its decision to lift subsidy of retail petrol. However the manner by which the government was doing it was shocking to me, to say the least. With the sudden increase in fuel price it will have major impact to the people all round, from farmers to traders, to government servant to private industries, bankers and businessmen and all of us. It’s not difficult to visualize the chain reactions resulting from increased in fuel price. Just about everything around us has in one form or another are dependent on fuel.

As we got down in the morning for breakfast, the bread, egg, butter, jam, coffee will has impact in production and transport charges due to the increased I fuel price. I recently noted that a trolley-full of grocery shopping in Giant hypermart will cost me RM 400+ compared to RM 300+ a year ago. Not too log ago it was RM 200+. Now with the recent increase in fuel I am anticipating a RM 500+ for the same trolley filled up with groceries. I am a medium size family and the groceries will last me a month on normal consumption. I have been using this benchmark for years and its kind of my consumer index heh..heh. I am not savvy enough to compare prices of each single item; therefore a trolly-full will do for me. Also my heart is not very strong to go through ten’s of items in the shopping bags and cringe at every time I see an increase in item’s prices. So there’s my basic analysis based on trolley-full of groceries.

Lat week RM 100 will last me a week’s petrol for going to work and return. Now with the 39% increase in fuel I anticipate that I will now need RM 140/week for fuel. Using the same formula all over I will see a reduction of at least 30% of my buying power with the same salary I am getting. With average increment of at best 10% per year I will need 3 years to return to the same buying power as before. However the world is not an ideal place, therefore with other factors thrown in such as unstable world economy, crash in stock market, further increase of fuel price, continuing war in the world especially in Arab countries, etc it’s unlikely that I will enjoy the same buying power again. So overnight I, like the majority of people in the country will be poorer by 30% all due to the government increasing the fuel price.

Like I said its not difficult to visualize the domino effects of fuel price increase with price escalations of foodstuffs, water, electricity, bus fares and fares of all forms of public transport, clothing, services etc and very soon inflation will creeps in. This will be going on for a while and government will be doing its bits to institute price check, price control, price campaign etc. However the fundamental law of economy can’t be restrained for long and very soon the Government will caved in to trade unions call for salary increase for government servants. This will always be followed by similar increase in the salary of private companies and the vicious circle will just goes on and on… and all round there will be increased in cost. Therefore with the overall increased in prices of goods and services the Government and the industry at large will be paying for higher cost for new projects, development, initiatives etc. Therefore is lifting the petrol subsidy worth it in the overall scheme of thing??

I am not an economist and all the scenarios above are based on logics and a bit of experience acquired through my work experience thus far. However it just seemed that the Government has been hasty in its approach in managing the country’s economy. With Malaysia being net exporter of crude oil, I am sure the country can withstand the world-wide crude price escalation a bit better than other countries that are non oil producers and who are also net importer of crude. The Government should have more flexibility in managing this issue (compared to others such as Singapore, Vietnam, Philippine) and should have taken a wiser approach that will benefit the country in the long run.

As we braved ourselves for a “teh-tarik” that will cost us RM 1.50, basic nasi lemak for RM 1.60 to RM 2.00, a roti canai for RM 1.50 etc, we hope that somebody in the present Government will be brave enough to call for a change in the economic strategy of the country. I cringed to think that our finest days are over and that Malaysia will never be the same country to live again….Ya-Allah Selamatkan Kami dan pelihara lah Kami….Amin!

Jebat_Siber