Petrol Price Hike Will Have Ripple Effect On Economy By Debbie Too

Brunei-Muara - Members of the public feel that the petrol price hike will have a ripple effect on the economy. Many, including businessmen, are of the opinion that if petrol prices go up, there will be a definite impact on many commodities whose prices will bound to increase.

"If petrol prices were to increase then we would be forced to jack up the prices of our services as a huge part of our costs goes to travelling," said Ken Han, Director of Product Development and Marketing of 24-7 Assist, a vehicle assistance company.

Pehin Orang Kaya Seri Utama Dato Seri Setia Hj Yahya Begawan Mudim Dato paduka Hj Bakar, the Minister of Energy, he said at the Energy Week Roadshow in Temburong yesterday that the government was currently subsidising 72 per cent for diesel fuel, which costs $1.12 per litre and is being sold for 31 cents per litre, while premium 97 petrol costs $1.13 per litre and being sold for 53 cents per litre, meaning the government is currently subsidising 53 per cent of the costs.

He also mentioned that the difference between actual production cost and pump prices will continue to increase due to the rise in international oil prices which recently hit US$ 100 per barrel.

One of the major worries of the government is that the cheap pump prices are leading to inapt oil consumption.

"In this matter, I, myself think that the realistic price rate is needed to reduce the usage of oil in the country to be more sustainable. Realistic market price rates will ensure a change in attitude as a whole," said the minister. He also mentioned that many countries have taken steps to ensure that pump prices for oil products depict actual market prices. However for Brunei, while there have been several directives being issued by the government to create more awareness about energy conservation, the population does not seem to 'be reducing its oil consumption.

While the biggest oil consumer is the transport sector - land, marine and air, the residential and commercial sector is the second largest consumer of natural gas, and is showing an increasing trend, with a 10.2 per cent growth in 2000 to 2003, to 13.7 per cent in 2003 to 2006.

Some members of the general public said that if petrol prices do increase, many might consider car-pooling or alternative modes of transportation like cycling to nearby destinations.

"Lots of people in Brunei cycle around, and car-pool especially if they're living close to each other. If the prices of petrol increase, these two trends will become common," said Tan Ye Wei, a car enthusiast. "You can be sure that if there is an increase in petrol prices, then a lot of people will change their car buying habits. Bruneians buy cars as though they are buying groceries, I wouldn't be surprised if many in Brunei start to sell off their cars and start making inquires about the petrol consumption of new cars," said Arthur Wee, a car battery shop owner.

According to the Energy Unit of the Prime Minister's Office, the transport sector is the highest consumer of energy in the sultanate, accounting for 53 per cent of Brunei's total energy consumption in 2006. It also registers a high growth rate, from 3.2 per cent in 2000 to 2003; to 8.3 per cent in 2003 to 2006.-- Courtesy of The Brunei Times

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