Where’s My Money?

A few months ago the price of petrol and diesel were raised drastically from RM 1.92/L and RM 1.50/L to RM 2.78/L and RM 2.50/L, respectively. These overnight price increases created a chain reaction which led to price increases of everything including basic goods and essential items. Ordinary folks suffered the most while trying to cope with earning an honest income and surviving on the ever-shrinking purchasing power of our ringgit.

Our caring government then came up with mechanism to help us ordinary folks by giving rebates when we renew our road tax. Car owners of 2000 cc capacity and below are entitled to collect RM 625 each whereas motorcycles owners are entitled to RM 150 each.

Some might have wondered why those in power didn’t consider floating the price of petrol and diesel like our immediate neighbour down south – open up the market and let demand/supply dictate the actual price consumers are willing to pay. It makes little sense to revise petrol and diesel prices once every month, once every 3 weeks, once every 2 weeks or even once a week.

And there’s the fiasco where consumers faced short or even no supply at petrol stations in certain states. Reasons given include (1) most tanker drivers were on Deepavali holiday, (2) petrol station operators did not submit their orders earlier for payment clearance, (3) petrol station operators bought less amounts than usual to avoid losses when prices drop. The Domestic Trade & Consumer Affairs Minister reminded the operators it’s just part and parcel of running a business when they face losses. Heck, who in their right mind would do business knowing that each time the authorities control/drop the price of the goods they’re selling, they face (big) losses?

While the petrol station operators continue to lose money, who gains? It’s like a zero sum game. The authorities repeatedly assures the public that we’re still getting a 30-sen/L subsidy for our petrol. But with each delay in price adjustments when global oil price drops, who pockets the extras? Are we getting more rebates soon? Will petrol pump prices drop below RM 1.92/L if the global oil price drop further?

Image taken from here.