Petrol price are getting higher and higher.

          According to the star online Sept. 2012 RON 97 price increase to RM 3 per liter.

          Malaysia has many kind of petrol, RON97 are one of it, RON 97 is higher quality depend on other petrol.

           Following the worlds fuel price in the market, petrol price often rise up, now petrol price is getting more higher and higher, but whenever petrol price is getting higher and higher consumer still willing to buy petrol, because petrol is inelastic, don’t have alternative goods for petrol, if our car didn’t pump petrol our car can’t move so we really depend on petrol.

          As we can see in the graph whenever the price is change the demand still remaining the same, this is because petrol is inelastic goods, so it will not affect to Petrol Company. Inelastic is when the goods or service are change is not affected to supply and demand. We also can see inelastic in cigarettes, all the addicted to cigarettes will willing to pay as much as they can to buy cigarettes so if the price of cigarettes increase it just affected small amount of demand, but it’s different to elastic goods, like sample if the price of apple is increase the demand of apple will decrease it’s because apple is elastic, when can buy other thing to replace apple like banana, orange and other fruits, we also can stop consume apple.

So if RON 97 price increases to RM3 not affaect6ed to petrol company but it will affected to us, especially to student or lower income people, for student whenever the price is high we also must buy it if not we cannot drive to school and attended the class, but we can’t say to our lecturer” our car don’t have enough petrol because the petrol price is high”.is also same with working people who drive to work, they also must work every day, so they still must buy the petrol, whenever the petrol price is high working people wages also not change higher.

          Actually we use public transportation like bus, train(KTM,LRT,monorail) or taxi, bus and train is more cheaper ,but the time table is not accrued especially KTM, in ktm station time table is not accrued and the differences of the time is too far, so we will late to class or work, it’s also too many people take bus and train going to work, we will stand in the bus or train, the worst if the bus or train very full we will squeezing  in there, you will hard to breath ,after that our clothes become messy, it’s really bad for working people, because they must wear tidy clothes to work, they also need meet their client if they dress up messy they give their company bad image, if the bus and the train are full the driver also don’t allowed us to get in into the bus or train so we must wait to next train or bus, if we lucky we can just wait for 2-10 minutes but if unlucky we will we 30minuttes or maybe 1 hours , and sure we will be late. Bus and train also can’t reach some place, so if our working place or school can’t reach by bus or train so we must think another way, and we just can take taxi but taxi fare its really expensive, the minimum rate are RM3 ,from subang to KL if we take bus or train just cost us RM3 but if you take taxi will RM20-RM30,if jam maybe RM50-RM70,but bus and train not charge u more when jam, but the consequences u must take risk with the time, in Malaysia some taxi is illegal they don’t use meters they just tell u the price before you get in to taxi, the price will more expensive to the meters taxi, maybe they will charge u double or triple this is because in your area hard to find meters taxi so the illegal taxi will take a chance to earn more.it prove that driving car is the best way to going class or work.

          Ron 97 price go up will affected many thing price go up, as we can see in Malaysian when government announce tomorrow petrol price go up and in the tomorrow morning many of this price is up like vegetables, fruit, meat, rice, maybe bus fare, taxi fare, train fare, bread and many all things, when we ask the seller why the price of apple goes up they will say because petrol price is goes up, because from farm to market they must need lorry to pick up and lorry need petrol.

           Many of farmer also didn’t want sell their fruit vegetables to the city because the cost of lorry is high, so they just sell to the nearest area, because of it in the city lack of fruit and vegetables the demand are more than supply and become shortage, every one willy to pay more for get fruits and vegetables .

       As we can see in the graft the price of food and vegetables will go up if the demand more than supply. The demand shift to the right and the supply shift to the left.

       we can see when the government announce the petrol going up by next week ,and in this week all people are buying petrol as much as they can so the petrol demand were increase, and will shortages, and this will causes black market. Black market is an illegal market in which the price exceeds the legally imposed price celling, price celling or price cap is a regulation that makes it illegal to charge a price than a specific level.

         As we can see in the graph 2 the quantity demanded are lesser than quantity supply so the amount between is shortages, so because of it someone is willing to pay a higher price.

          In conclusion RON 95 price up will just affected small amount of people to buying petrol it’s because petrol is inelastic goods, but it will affected price goods in the market like vegetables, fruits, meat, rice and others. And it will causes black market

by: hioe stephanie olivia