Cheap Stuff is Not Always Good

Cheap Stuff is Not Always Good

By Hamzah Nor Sihab | Hamzah Nor Sihab | 12 Dec 2022


Everything have been too cheap for too long.

Consumption increases every year followed by rising prices of goods. Inflation also exacerbated the economic situation in the country which caused an increase in commodity prices as well. Complaining is a natural thing because the amount spent on needs has also increased drastically. However, when the price of commodities and consumer goods becomes cheap in the long term, this will have a negative impact / problem on the country. One commodity that is influential in many aspects is fuel (fuel oil). When the price of oil goes up, it will be followed by an increase in the price of other basic goods. In this content, I took the example of the Indonesian fuel price

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The table above shows a comparison of fuel prices among ASEAN countries. According to the Global Petrol Prices report, the country with the lowest average price of fuel in Southeast Asia is Malaysia, which is IDR 6,965 per liter ($0.45). Indonesia has a fuel price of IDR 16,500 per liter ($1.06). Meanwhile, Singapore is the country with the most expensive average fuel price in Southeast Asia, which is IDR 30,208 per liter ($1.94).

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Looking at the total population of the member countries of Southeast Asia. Indonesia occupies the first position with the largest population which will result in an increasing number of fuel usage as well. With a population of 255 million, fuel consumption per day is 1.4 million barrels / day. If there is a change in price, this very large fuel consumption will greatly affect daily activities or business activities.

Fuel prices are still cheap in Indonesia due to subsidies from the state debt.

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Fuel prices in Indonesia are still supported by subsidies from government debt for oil and gas import spending. The increase in fuel prices should have happened so as not to burden the state's finances.

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Hamzah Nor Sihab
Hamzah Nor Sihab

Just an ordinary student who wants to learn about crypto markets and macro economics to survive in this cruel financial world


Hamzah Nor Sihab
Hamzah Nor Sihab

Just an ordinary student who wants to learn about crypto markets and macro economics to survive in this cruel financial world

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