The Mystical Economics Of Fuel: What Goes Up, Don't Seems To Want To Come Down

FUEL PRICE HIKE

On July 1, the Malaysian Government announced the new revised retail price for RON 95 and RON 97. The full retail prices are indicated below:

• RON 95: 10 sen increase to RM 2.15 per litre (exclusive GST)
• RON 97: 20 sen increase to RM 2.55 per litre (inclusive GST)
• Diesel: Unchanged at RM 2.05 per litre (exclusive GST)
• Euro 5 diesel: Unchanged at RM 2.15 per litre (exclusive GST)

le queue up at petrol station to refuel their tanks in Petaling Jaya. The Malaysian Insider pic by Najjua Zulkefli, September 3, 2013 - See more at: http://www.themalaysianinsider.com/malaysia/article/upset-malaysians-dismiss-putrajaya-cash-handout-believe-fuel-price-hike-pre#sthash.zFJejk6x.dpuf

Thing of the past? The Ministry of Domestic Trade, Co-operatives and Consumerism will no longer announce the fuel price changes beginning July 2015. People queue up at petrol station to refuel their tanks in Petaling Jaya on 3 September 2013. Picture by Najjua Zulkefli The Malaysian Insider (Image Source)

The increase somehow caught me by surprise as the Ministry of Domestic Trade, Co-operatives and Consumerism has announced that they will no longer pre-empt with notices any fuel price increase in the future. Somehow, the price increase caused uneasiness among the masses as the people have been dangling with the prospect of another increase in toll charges.

PARKING RATE HIKE IN PUBLIKA

Publika in Sri Hartamas, Kuala Lumpur, Malaysia. The new parking rate will be enforced middle of July 2015 (Image Source)

On top of that, most of the people I've been talking to are expecting the prices of goods to go up as well. My Buddy recently complained that the management of Publika, an up-scale shopping mall located within the vicinity of the affluent Sri Hartamas neighbourhood, has announced new maximum rate for their car parking facility to RM 20 daily with overnight charges of RM 35. Little wonder why we're not among the top 10 shopping cities as compiled by the Travel Channel and Huffington Post this year. Never mind, we can take consolation, at least for now, that we have at No. 5 and No. 9 spots respectively, two of the top 10 largest shopping malls in the world by gross leaseable area (1Utama Shopping Complex and Mid Valley Megamall). 

1Utama Shopping Complex (Image Source)

Mid Valley Megamall, Kuala Lumpur (Image Source)

OK, back to the car parking issue. My Buddy hasn't purchased the season pass as it's pretty pointless to pay for something without guarantee. Despite paying for the season pass, my Buddy is still being subjected to the ebbing of the parking bays. At times, getting an empty bay is snappy, some other times, not so. Facing with ever increasing cost of living, I could understand my Buddy's situation. I was jobless for three months with people's mercy as my currency. I could really feel first hand the pinch of joblessness and without any financial guarantee hedging me from going under.

TRADERS' GROUSES

The funny thing is, we would always hear grouses from the traders about their operation cost being squeezed as the direct result of fuel price increase. However, when the fuel price come down, they claimed that their operation cost is high. Sometimes, I do think that Malaysian manufacturers are not really concern their role in promoting high income for Malaysians. 

In one of our workshops held in Johor Bahru, an economist proposed to reduce our dependency on unskilled workers by going for automation. Afterall, the southern region is looking to achieve a projected population of 3 million by 2025 and looking at current situation, Johor Bahru will probably be a city of 3 million people (as outlined in the Comprehensive Development Plan 2025), mainly doing labour intensive jobs and it is likely that the majority of them will not be Malaysians.

IS THIS THE MAIN CULPRIT?

Beginning early this year, Johor State Government has imposed indefinitely, a moratorium period for application of new serviced apartment projects. Currently, Johor Bahru suffered from a property glut. The current housing stock would last for the next 30 or 40 years and already, property prices are matching prices in Kuala Lumpur, boosted mainly by Singaporean purchasers.

This eventually lead to the gist of my posting; fuel prices doesn't affect much our cost of living. Except for Paya Terubong in Penang, this one particular thing has not gone down at all. It's property prices. 

Physical development void of humanity? I personally think KL has no soul. Its soul has died long ago (Image Source)

Of course, this is what I thought. In order to help demonstrate my conviction, from today onwards, I shall be reporting on property market scenario based on the report produced by the National Property Information Centre (NAPIC). Nowadays, land and houses are being treated as commodity and instruments of investment without any consideration of its impact to the people that really need a roof above their head and land under their feet.