Joecities

Wow. I don't know how I would feel to have the founding father of the nation call me a "bad egg". I do know what it's like to be in the deity-like presence of the MM though, and I reckon they're using a wrecking ball to crush an ant.

According to my mom, elections are on in my neighbourhood. And despite her reckoning that there's "no contest", it's still a missed opportunity for me to vote (I didn't realise the election register was open, so I missed the chance to register as an overseas voter). I've never had the chance to vote (it's always been a walkover) and the opportunity has eluded me once again.

Came across something else that I thought people need to know about.

Petrol companies should NOT be making record profits. This was sparked off by my economics professor who in turn was jumpstarted by Jon Stewart.

Let's see if I can explain this - There're two basic concepts in play here. One is profit margins, and the second is around competitive pricing.

Say the price of petrol starts out at $1 per liter. Of that $1, let's say the petrol company takes 30%. So 30 cents out of every dollar goes to the petrol company. For simplicity's sake, let's say that the 'raw material' for the petrol, which is oil, costs 70 cents - which goes to the guy who owns the oil well.

So according to the petrol companies, there is increased demand from India and China, and lowered supply from nigeria and iran, etc. So the price of oil increases. Fair enough.

So the oil now costs 80 cents. What should be the final price of the petrol ? Nothing has changed at the petrol company, they still use the same equipment, hire the same amount of staff, etc. Final price should be $1.10. They should still make the same 30 cents and thus have the same amount of profit.

Okay so that's profit margins. Now the second concept comes in.

If one company raises it's price, and if the other company (who is a competitor) doesn't, it stands to win more customers because of its better pricing. If you don't care about the other guy, you'd keep your prices low and win over their customers.

The way to maintain the same number of customers and earn more money is for ALL of them to raise (and hold) their prices at the same time.

What's the likely explanation ? That petrol companies are taking advantage of increased oil prices by increasing their profit margins AT THE SAME TIME.

Basically, the conclusion is that prices are being artificially inflated and the everyday man is being bullied to fill the pockets of the petroleum company executives and their shareholders.

There's only so much people can do. While trying not to sound like a whiner, I think it's up to the governments of the major petrol markets to work together to break the collusion of the petroleum giants. In the meantime, I think I need to go shopping for a bicycle - or buy some of them petroleum stocks. :D

P.S. I just read the official goverment stance around James Gomez and his actions. Wow. Talk about conspiracy theory. Although I do recall from the past that James had a conspiracy theory of his own which was a little scary. Ask me if you really want to know. As a couple of my friends who use this term wayyy too often would say it's all "alleged" though. :)