Why don't I feel surprised with this kind of news anymore? It's because it has become a commonplace in the country I live in. The rumors and so called announcements come the day before around noon and by nightfall, you will have cars lining up at petrol station causing havoc and congestion everywhere just for them to save a few ringgit on their petrol cost. I often wonder why bother with all the hassle when you would be burning around the same amount of petrol waiting for your turn with your engine running and air-conditioning turned up.
The price of RON95 increased from RM2.10 to RM2.30 per litre while diesel from RM2.00 to RM2.20. The current unsubsidized market price for RON95 is RM2.58 while diesel is RM2.52 per litre. The same 20 cents increase happened slightly more than a year ago on Sept 2, 2013.
While the repercussions of this circa 10% increase to motorists may be nominal in relation to their petrol consumption (most of us may experience an increase of around RM100 per month for heavy users), the bigger picture would see price of everything else classified as a tangible product to an intangible service increase in price in relation to this increase in petrol price. As for tangible goods, everything produced in a factory or from a farm or orchard is transported by lorry or trailer to it's final destination, be it at a retailer or wholesaler. An increase in petrol cost would mean higher transportation cost incurred by the market intermediary which would eventually be passed on to the final consumer.
As for services, for example even the professional services of your neighbourhood doctor would expect to see some sort of an increase because your doctor would be driving to the clinic in his expensive high powered car which incidentally would incur more in petrol cost.
Everything we use requires it to be transported to a place convenient for you to purchase and consume. The transport and distribution network is part of a larger supply chain while the place convenient for you to purchase the finished goods is the marketplace.
While the government of the day will have measures in place to keep prices of consumer goods in check and to prevent unscrupulous traders to simply raise prices as they like, the distribution and transportation cost would eventually need to be passed on to the consumer if manufacturers were to maintain their cost price without compromising profits and traders to maintain their selling prices also without the desire to compromise profits. Business is all about making money while fulfilling consumer needs and not only to fulfill consumer needs alone. That is what capitalism is all about. If the key focus was to meet consumer needs alone, then every organization would become a Non-profit organization or we would need to resort to practicing communism instead.
Ironically, the night the government announced the price increase of the RON95 and diesel petrol in which the majority of road users pump for their daily use, KL was hit with flash floods which saw cars parked in open air carparks partly submerged in water and stalled in roads turned mini streams. This was coupled with apocalypse style sea of cars lining up at petrol stations trying to pump petrol at the old price before the 20 cents per liter increase at midnight. The whole city turned chaotic with the rain and cars everywhere creating bad traffic jams throughout the night. The next morning, the city woke up to more traffic jams with cars jam packed on literally every single road and highway in the city. Even the ones with multiple tolls. I wonder if all that queuing up at the petrol stations the night before was to prepare for the bigger chaos the following day. If so I guess queuing the whole night for petrol would pretty much be justifiable.
More ironically, come April 1 next year (2015), Malaysia would be implementing the Goods and Services tax at 6%. Guess how much more the prices of goods and services would be? Someone on social media lamented, 'everything increase in this country but our salaries remain the same'. I guess this is the reality of the world we live in today. It's not the same as 10, 20 or 30 years ago where anything and everything is much cheaper in relation to what we pay for today. You name it, anything! The familiar complaints are, 'in those days...' or 'gone are the days...'. Yes, all of us reminisce about the past. Even kids!
I guess, the best way forward is to look to the future and plan ahead. Well, for me at least. A good friend of mine used to tell me, things are getting more and more expensive these days so instead of trying hard to save money, why not try hard to make more money? It's easier to be more resourceful rather than be more stingy. Our lives would be much better and comfortable if we are the former.
Wednesday, October 01, 2014
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