#016: Bite the Bullet

That’s what many of our minister had been saying in the wake of the fuel price increase. When I first heard the news, I did not give much thought about its consequences but the slightest idea I had is that things are getting more expensive from now onwards. And I was not wrong in the slightest bit.

Because it hurts to fill the tank
Because pumping fuel into your car is a pain in the arse.

At first, many analysts and wanna-be analysts (like my dad) speculates that the government will lift the price of petrol up to RM 3. My guess on the other hand, believed that the government is not trying to be harsh against the rakyat and would probably give some subsidy to an extent and tag the petrol price at RM 2.80 or RM 2.70. Reading the news update from NST Online and Malaysiakini on Wednesday confirmed my prediction. The fuel hike was set at RM 2.70 for petrol and RM 2.58 for diesel. In that instant, people were rushing to get their tank filled to the max before the price change after the stroke of midnight. Luckily for us (my family), my dad had already did that a couple of hours before the news broke out. As for the millions of car owners throughout the country, they had to join the queue to the petrol station; bumper to bumper.

And I thought there\'s a sale at the pump station
And I thought there’s a sale at the pump station.

Now let’s get to the whole degree of the situation. With the fuel hike, the first to hit out is the public transport industry. The hike gives them the excuse to “pass on” the dearer fuel cost to the consumers. How can this be allowed when the government assures that the public transport operators will remain to have their diesel fuel subsidized at the old price of RM 1.58. So, no reason to spike up the bus fares there. Then, the F&B business. Many coffeeshop owners and also small-time eateries in unison believed that the rising fuel cost would bleed out their profits and would be considering to increasing the food and drinks pricing. Maybe it is because they actually drink petrol to cook and prepare drinks or maybe they need diesel to blacken the coffee and petrol to toast their breads. Whatever their reasons are, any of those just doesn’t make sense. I can’t see the link between high fuel cost with the F&B service. And then, there was the nonsense rumour. Just like any other rumours, this is not true. Even so, it caused a hassle to us when we were trying to shop for some cooking oil which ran out in many supermarkets due to that hysterical rumour. Judging by all these hikes, they are all rooted from the hike in the petrol price alone. The subsequent increase in cost of living is inevitable and I’m sure the government is fully aware of this fact.

To put things in perspective, the rise in fuel price is not all too bad after all except for the mind bogging financial burden, of course. We alone are not suffering from this problem. Countries such as India, Indonesia and even the United States and the United Kingdom feel the pinch of the high oil price in the global market. The reaction is expectedly negative everywhere but the Indians made it very clear to their government. Let’s just hope that this would not happen here in Malaysia. This comes to mind that the govenment must come up with an effective plan that will save the pockets of all Malaysians while easing off their burden from the spiralling oil subsidy. The proposed rebate is good but ridiculous in my book. It seems like a short-term solution to me. Likewise, other countries outcries the high oil prices in their countries and the ones who suffer the most are the poor. Even Malaysia could not escape this scenario. The lower income group in the country cannot possibly cope with the high oil price and whatmore the price hike on many products and services that follows it. Tun Dr. Mahathir did made his point that the standard of living among Malaysia will be greatly affected by this move from the government and compared to the developed countries with the higher living standard to be able to absorb the impact of the rising oil price. This is definitely true because with improved living standard of the citizen, only then we can accept the fuel price hike better while enjoying a better and comfortable life with this economic stability. This brings to the root cause of the whole problem revolving the high oil price that is greed that consumes many opportunistic entrepreneurs. The problem is the rise in fuel price will give them the excuse to increse the price of their products and services, whether it is related or not, and this consequently cause unnecessary inflation which then hits the nation’s economy and affect the living standard of the citizen. The politicians call it the economy tsunami. I call it the domino effect.

Munching up your cash
The new gold digger: oil

So, how did the oil price rise? Are we running out of oil? That’s not true. Only recently, the OPEC representative told press that there is more than enough supply for the current demand. If that is the case, then someone must be taking advantage to raise the oil price. Datuk Seri Idris Jala gave a good explanation behind this. Instead of the basic idea of supply and demand, an outrageous speculation throws turmoil to the oil future market that brings to the increase in oil price. Read the article for the details.

As for now, in this unrestive atmosphere, let’s just bear with it for awhile.  Though the problem is burdening but I believe it is temporary, only if the government can safeguard the economy so that the percapita income improves while the consumers price is continuously controlled. When this can be achieved, I can only sigh a big relief until then. At least, the good thing that comes with this is to teach the people about financial prudence. Ain’t it a good thing?


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