Petrol price hike again

Oil price hits US$111. A good and justifiable reason to hike petrol prices. Is it? If I am not mistaken, oil prices are traded using US$. We are paying in S$. S$ is appreciating against US$. The petrol price hike is in S$. Are the price hike justifiable? Is CASE looking into this to make sure consumers are not taken for a ride and petrol companies are not profiteering? Can any thing be done to absorb the price hike? With a higher base price for petrol, revenue from petrol tax and GST will go up proportionally. Can this be adjusted to absorb the hike? Oil price cannot be controlled by us, external factors. But taxes are within our control. Or are we looking forward to another pleasant surprise of budget surpluses next year?


Anonymous said...

i tot the "local guru" said oil price hitting US$111 is impossible? that the stock market will be intact? WTF anyone could have lost a sizeable fortune listening to these inaccurate advice.. you shudnt regurtitate angmohs' comments when you dun have a clue abt the markets becos angmohs are there solely to make deals, not accurate forecasts.

Matilah_Singapura said...

I agree. Fuel taxes should go. The trouble is, very few govts in human history have been willing to give up a guaranteed revenue stream like fuel tax.

I've mentioned before that $200 per barrel is not unlikely, so be prepared (I am) to pay $3 + per litre within the next 2 years when oil hits 200 and above.

You will notice the oil to gold ratio is about 1 to 10 (very rough estimate) $100 oil, $1000 gold, that sort of thing.

To intervene in the market is suicidal, because you will only upset the price mechanism. The best way to affect the rising oil price is to use less. However it is obvious that the demand for energy is quite inelastic -- even though the price of fuel has increased, people are unwillingly to cut back and simply pay the higher prices and get on with their lives.

That being said, it the tax on fuel--rising in price-- is not decreased or removed, the govt surplus will be enormous.

Matilah_Singapura said...

To intervene in the price is suicidal. For e.g. Indonesia is going broke trying to keep up with petrol subsidies.

I do agree that the taxes on fuel should go altogether or be substantially reduced, and if they are not, we will definitely see a staggering govt surplus in revenue.

As I've written before, there's little doubt in my mind that oil will be $200+ per barrel. Check the gold to oil ratio -- it's about 10 to 1. $1000 gold, $100 oil. We'll be paying $3 + per litre within 2 years and gold will probably be $2500 ++.

The energy demand has so far been inelastic. People will just pay the higher prices and get on with their lives. at what point will they start cutting back, no one can say. Everyone has a different preference scale when it comes to how they spend thier money.

Anonymous said...

i guarantee you oil price will not exceed $120! rember i told you here.

redbean said...

in cyberspace, we can talk anything and guarantee anything : )