RON95/Diesel price increase: let me try again


Rest Stop Thoughts

Several people commented on my previous post on the petrol and diesel price increases in Malaysia. They said: “go back to the Netherlands,” “but the Dutch earn a lot more,” “why make comparisons,” “but the Dutch have minimum wages, social security system, etc.”

Essentially, they said I made false, incomplete or irrelevant comparisons.
Since some such comments were written by people whom I know are capable of thinking well, I felt compelled to review what I wrote.
I’ve concluded they responded as they did because I either didn’t make my points clearly or I assumed too much willingness on their part to try to connect the dots. I’ve decided to try again.
Fuel price comparisons
I mentioned the fuel price in the Netherlands because being there made me more sensitive to how much difference there is in fuel prices across the globe. If I had returned from Iran, I would have stated that petrol is virtually free there. So, the point is not the price in the Netherlands, the point is that all nations have to fix the price of fuel, taking into consideration many factors.
Consider the price of petrol and diesel in 9 countries in our region which foreigners often consider investing in. According to a source which I have not verified, this is the price-at-the-pump, in Euros in August 2013:
Petrol: China 1.25; Singapore 1.25; Cambodia 1.08; Thailand 0.95; India 0.92; Philippines 0.91; Vietnam 0.89; Indonesia 0.72; Malaysia 0.64.
Diesel: China 1.25; Singapore 0.95; Cambodia 0.92; Indonesia 0.80; Vietnam 0.77; Philippines 0.75; Thailand 0.72; India 0.65; Malaysia 0.53.
Does the following surprise you?

  • The price of fuel in China, the world’s source of “cheap goods,” is about double that in Malaysia. In case you’re wondering, for the USA: petrol 0.71; diesel 0.77 (Euros).
  • Despite the low price of fuel in Malaysia, we’re losing investment to the other countries.
  • In some countries diesel isn’t cheaper than petrol.
    Again, a caveat: I’ve not verified the data, and I am concerned that it’s hard to find fresh local articles on this subject in on-line media. Am I wrong to expect reporters/journalists to consider the big picture and to do the verification?
  • Thanks in part to the ‘low’ (!) price of fuel in China, the Chinese are abandoning their bicycles, while the Dutch with their expensive fuel, even cycle daily to work. (There are many reasons for this, fuel taxes and bicycle lanes are amongst them.)
Which countries subsidize fuel?
According to Wikipedia (i.e. unverified), the following 12 countries subsidize RON95 petrol: USA, Saudi Arabia, Iran, Egypt, Burma (sic), Malaysia, Kuwait, Bahrain, Trinidad and Tobago, Brunei and Bolivia.
Recall that the USA is widely considered not only a wasteful society, but also a society which shamelessly proclaims its ‘right’ to waste the earth’s resources. Recall also that the 11 other countries in the list are rarely considered models of good nation building.
Minimum wages & salary levels
In all the “discussion” I reviewed in the course of writing my essay, I couldn’t find a single media article which listed minimum wages and median incomes. I’ll leave you to speculate why.
Do you agree with the following?
  • Just like the discussion of fuel prices, discussion of minimum wages should be multi-dimensional (‘nuanced’), not just “us versus them.”
  • Not all nations with fuel more expensive than in Malaysia offer unemployment benefits, health care and retirement benefits.
  • The imposition of Generalized Service Taxes (GST), price controls, the general level of income taxes, etc. should also be considered when discussing subsidies.

I was silent about higher wages and salaries in the Netherlands. My critics are silent about the higher deductions in the Netherlands for income taxes and welfare benefits.

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