Fuel

When I came back to Malaysia, one of the first things that I saw in the papers was talk of a floor price for petrol. HOW IN HELL IS THIS F***ING HALF-BRAINED EXCUSE OF A PLAN GOING TO BENEFIT ANYONE??

The obvious problem at hand is the fuel subsidy. It should never have happened, but now that it has, there is no viable way to regain the funds sunk into the subsidy. Now that fuel prices are similar enough to the actual price, it is time to remove it, once and for all. Even a first-year economics student can tell you that a subsidy's side-effects are negative for the economy as a whole as it involves a transfer of benefits, with a little lost in transition.

And instead of removing the subsidy for good, we might even have a floor price. What hare-brained thought of that? If that person is in charge of our financial policy, I would be very, very afraid for our country. A floor price means that whenever the price of fuel drops below that set amount, the government or the oil companies gain the difference. There is no limit to the heights that oil prices will reach though. Whatever benefits a subsidy has would no longer exist. The fuel market would be restricted in a way that benefits only the government or the oil companies. Neither of whom I would trust.

One argument I've heard is that it is to protect the petrol station owners as they would have bought their oil at a higher price. Screw that, I say. With a proper system in place with the necessary regulations, a free market for petrol is not unworkable. Have you heard of Weighted Average Cost? Use that, idiots. Weight the cost of inventory, work out a suitable profit margin, and sell your products. Of course that would only work in the case that THE PETROL PRICE IS NOT FIXED.

Rawr. Idiots.