Posts tagged ‘prices’

October 18, 2008

State of Denial?

The US markets have been tumbling due to the crumbling of mega financial institutions.  Their government has taken swift action to shore up the impact.  The European markets are having the tremors.  The Asian markets are significantly impacted.  Even Singapore announced that they are in a technical recession.  But our Malaysian Government says we are still well protected and we will not be hit as bad as other countries.  What other countries?

Is this true or are we too busy with party elections?  Are we in a state of denial that our economy won’t be impacted much and is still very resilient?  Certainly, we want to believe that to be true.  But is it?

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August 23, 2008

Playing with Fuel Prices can’t reverse adverse Inflation effects

Yesterday’s news (read here).  First, Shahrir says the ceiling price for petrol will remain at RM2.70 until the end of the year.  Then, Pak Lah says that the Government will announce the new fuel price on 31 August and will take effect 1 September.

Today’s news (read here and here).  Pak Lah announces the reduction of petrol price to RM2.55 and diesel price to RM2.50 with effect tomorrow, Saturday 23 August 2008.  He says:

“It is the government’s hope that the reduction in the petrol and diesel price will help ease the burden of consumers and reduce the inflationary pressure, especially on the low- and middle-income earners. The decision is also based on the current economic development,”

Also today’s news (read here).  Inflation rose from 3.8% in May to 7.7% in June to 8.5% in July.  This was caused by the fuel hike in June and the electricity hike in July.

Did the Government think that the adverse effects caused by the crazy fuel hike in June can reverse the inflation rate?

Bloomberg today says:

Crude oil may rise next week because of a weakening dollar, tension between the U.S. and Russia and falling gasoline stockpiles.

For the full report, read here.

So again what was the rationale to reduce petrol prices?

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