The price of benzine (a low octane grade of petrol) was 4,500 rupiah a litre (about SGD $0.60). This is used by most vehicles, including non-luxury cars and motor cycles and is heavy subsidized by the government. The government wanted to raise the price to about $1 but could not push it through, due to large demonstrations.
The fuel were provided by Petromina and Shell. They received a subsidy from the government to sell the fuel at below the market price. There was also a need to prevent the subsidized fuel from being used for other purposes. For example, a consumer cannot buy the subsidized fuel in a can and has to be pumped into a vehicle - but there is really no way to stop the consumer from pumping the subsidized fuel out of the vehicle later.
Luxury cars in Indonesia have to pay a price of about $1.20 for a higher grade of petrol. This is still much cheaper than petrol in Singapore - which cost about $2.20, nearly double. Petrol is more expensive in Singapore due to tax (about $0.44 cents per litre).
The fuel were provided by Petromina and Shell. They received a subsidy from the government to sell the fuel at below the market price. There was also a need to prevent the subsidized fuel from being used for other purposes. For example, a consumer cannot buy the subsidized fuel in a can and has to be pumped into a vehicle - but there is really no way to stop the consumer from pumping the subsidized fuel out of the vehicle later.
Luxury cars in Indonesia have to pay a price of about $1.20 for a higher grade of petrol. This is still much cheaper than petrol in Singapore - which cost about $2.20, nearly double. Petrol is more expensive in Singapore due to tax (about $0.44 cents per litre).
5 comments:
Even without the tax petrol here is much more expensive because of several factors. Frankly there is no reason to continue with the 3/4 tank rule anymore as Singaporeans cannot buy subsidised petrol in JB. Still the unsubsidised petrol is much cheaper than in Singapore. If we could use Medisave to pay for medical treatment at certain hospitals in JB to take advantage of the lower cost, and the fact that KBW suggested Homes for the Aged in JB for the same reason, why not petrol? Why is there a need to protect the owners of petrol stations in Singapore, who are already wealthy people?
Dun agree with above comment.
The Malaysian Authorities have every right to prevent foreigners, like Singaporeans and Thais from taking advantage of their subsidized petrol.
Nevertheless, the culture over the causeway is less of the "money talk only, no room for negotiation" kind.
We are able to get subsidized petrol and subsidized entrance tickets to local attractions, even pay a traffic fine ticket of only 8 ringgit, just by putting on our thinking cap, it even amazes us how simple it is, without paying a single Malaysian cent.
Malaysia really Bolleh. We love our Malaysian neighbours, they have more heart and humour.
The fuel subsidy is a legacy of indonesia being an exporter of oil in the 50s up to year 2005 when they become an importer of oil. From year 2005 onwards, the ability of the government to subsidy their fuel diminish as the huge costs in importing the oil has lead to huge strain on their budget.The Indonesian government is stuck between two bad choices: continuing the subsidy which will cause huge problems in bringing down any budget deficit or losing the vote of their people.
@yujuan
The 3/4 tank rule is imposed by Singapore, not Malaysia. Foreign cars can only buy Ron 97, which is NOT subsidized by the Malaysian government. Singapore cars taking advantage of the cheaper non-subsidised petrol in JB actuall contribute to the economy. The 3/4 tank rule simply protects the interests of the wealthy petrol station owners in Singapore.
BENZINE PRICE PER LIT
Indonesia - 4500 Rupiah ($0.60)
Thailand - 44 Baht (above $1.60)
Heavy subsidy by Indo gov. Where the subsidy fund come from? How long the gov can go? How long can existing gov maintain its social order?
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