Ash Report

I read yesterday that the oil price has reached a record high of US$108 per barrel. Ouch and double ouch…. the problem for the consumers here in Malaysia (yes.. that’s you and me) is that we’re shielded from this crazy prices through the subsidized-fixed-price regime being implemented. But the govt-subsidy will not protect the businesses who will undoubtedly face higher prices for its supplies and raw materials - especially if they come from overseas. Like it or not, they are in business to survive and will then pass on the cost increase to users…

So the sequence to people-on-the-street will go like this. I heard on TV that US oil price increase again - dangerous but that’s overseas. But, stock market also increase - good. Petrol price not increased - good. Suddenly, my foodstuff become more expensive, price of my household stuff also went up and worst, by business suffering because I cannot cover the cost of my production. Soo unfair - somebody has to do something about this.

The problem is we have all embraced free market (big misnomer) economy - where demand and supply rule. We don’t live in a socialist economy (like Stalin’s or religion based) where social equitability rules.

What it really means is that - if you wish to, you can control supply of a high-demand product and you will rule. And as long as, people worldwide panic of high oil prices and buy as much as possible today - demand will be higher than supply and oil price will continue to rise until it balloons and eventually burst.

Really, what can we do? Not much.. Well, actually there’s something we can do but we Malaysians really hate to do it. Use less petrol and if collectively everyone do that, the market demand will slow down and the balloon will burst. But this is just like the crap-environmental-recycling mantra. Recycle? Save environment? Never mind lah … so troublesome some more. Know what I mean?

PS: Just to avoid misunderstanding from straight-line people, the last para is sarcasm. Really, it happens, it may not be obvious for everbody.

This entry was posted on Wednesday, March 12th, 2008 at 11:08 am and is filed under Ash Report. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.