Thursday, December 11, 2008

Petrol Pricing Issue

Hooray, I believe every motorists are cheers because petrol price is not drop below USD$45 per barrel. Yes, it is a very good news indeed. Low petrol price definitely lower the inflation and boost up economy.

Currently, the price is adjusted on a fortnightly basis based on the market price. The pump price for petrol is now RM1.90 per litre. I foresee there is still room to decrease the price by 50 cents, but government is having problem to do so. Perhaps it will down to RM1.80 on next week.

Now our government is having dilemma in making a decision on whether to set the petrol price at a floor price or let it float according to market price. If they continue to run price floating system, the petrol station owner will continue to suffer great loss every time government announce a new lower price, due to stock keeping. According to Domestic Trade and Consumer Affairs Minister Datuk Shahrir Abdul Samad, "if we fix a floor price, how low should it be, or should we adopt a managed float system."

Nah! It's not my hand. I don't know why this guy showing 'his' finger to Petronas. -.-

For me, it's a 'wasting time' question and they created the trouble themselves. First of all, they shouldn't hike the petrol price 80 cents in one go on early of June. They made a big mistake and thought that market petrol price will never goes down, and will hike forever. Well, they just never think what will happen next and in the future. They should have increase the petrol price by 30-35 cents initially.

I think floor price is a very lousy decision. They'll take a very high risk of the market floating petrol price, and then come back to us and complaint that they are subsiding us in a great loss. Well, this stupid complaint always happen and we are all know and sick of it.

When can we enjoy back the ex-petrol price of RM1.30 per litre?

I believe our government has not many choices for now. If they continue to run floating system, they should provide some subsidies to the petrol station owners in order to reduce their loss, and continue to keep motorists benefits from the lower petrol price. This decision should also allow government to reap more profits from the motorists subsidy, should petrol price continue to going down. They also should cut off the petrol subsidy of RM625 per year. This should be the wiser decision in overall, in terms of number of people to benefits, economy stimulation and inflation reduction.

I hope the right decision will be decided and taken soon.

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