YES To Realistic Fuel Prices

Many people may disagree with me, but I think after so many years, finally someone is thinking with a right mind!

If you read my previous post on car fuel, you would know that the prices of car fuel in Brunei are perhaps the cheapest in the world. It is not without its cost. And the cost is obviously borned by the government in terms of subsidy (for 1 litre of diesel, the government is paying about 80cents and 60cents for a litre of Premium 97). That is A LOT!

Many of you would, by now are probably thinking, 'So What? Oil Price is soaring high now, surely the government's coffer is filling and why not share with the people?' . Well, first of all, oil and fuel are 2 different things. The car fuel's prices depends on the oil prices. When oil price goes up, the fuel price also goes up or the cost of producing fuel goes up. The price that we pay however is way below the cost of production. That means the government has to spend more on subsidy to ensure the fuel prices we pay in Brunei stay the same.

Secondly, yes it is true that the increase in oil price would definitely increase the government's revenue, but the money could be spent on other productive things which would have positive economic long-term impact on the country. Life is, after all, not all about cars! And, I believe it is also the time that the government increases its saving (and investment) for Brunei's future generation. in order to maintain our standard of living.

Thirdly, I honestly think that it is high time that the Bruneians live in a real world. By having realistic fuel prices will definitely awaken many people. The last previous posts, I wrote about 'rentier mentality'. As a result, many Bruneians take things for granted. Ever since Brunei started to export oil, Brunei has become a 'welfare state' up to the point that the people do not seem even know how to stand on their own feet! The government becomes the soul provider and this causes Brunei economy to stand still. Worse, people endlessly complain that the government is not doing enough. People want MORE, but never GIVE back!

Look at Norway, the third largest oil producer in the world. Do you know how much their fuel costs? The last I check, it was about US$7 per gallon. With the current US rate, that's about B$2.40 per litre! The government imposes higher tax, at times when oil price goes up, to reduce consumption. And their population of about 4.5 million use cheap hydro energy power! Well, where they have 'hydro power', I think Brunei should seriously be looking at solar energy as an alternative. And, now is a GOOD time for Brunei to seriously invest in some solar power.

OK. If you are still not convinced that a reduction in fuel subsidy (an increase in the fuel price) will do Brunei a greater good, I also believe that other positive impacts will also result.

First, I think the transportation industry may stand a good chance to benefit from such policy. People may start using buses and taxis. If you are still asking whether or not Bruneians are ready to take such dramatic actions (dramatic only in Brunei as it is perfectly normal for people to use public transportation abroad) well of course the answer would be NO. No one is ready to change their comfortable lifestyle. But an improved transportation industry will create more employments, improve services and most of all, can help reduce pollution.

Second, the price of cars will go down. The rule of demand and supply will apply. As demand for cars go down, price will follow.

Third, people will (hopefully) think twice of buying luxurious cars for the sake of showing-off and instead will spend the money on other important matters in life :)

Finally, I also think that it will help foster a stronger family relationship and communication. People, especially family will economise the use of cars. Gone will be foreign drivers. Parents will collect their own children. Husbands and wives will probably share the same car. As a result, communication improves and LOVE grows.....hehehe.

Anyway, these all are just my thoughts. I will probably change my mind when I'm back in Brunei haha. But I still strongly feel that more positive effects will come out of a policy change in the fuel subsidy. Proper research on the impacts obviously are called for. I do however hope it WILL be implemented.

Salaam.

P.S I am still sure that many of you are saying that 'Other prices have gone up too!'. Well, I say 'Welcome to the Real World.....'.