I refer to the Malaysiakini report 'Fuel prices not solely dependant on global crude oil prices' .

On Nov 14, it was reported that ‘according to a daily survey for the American Automobile Association, the US national average price for a gallon of regular gasoline is US$2.152.

‘In Missouri where gasoline is the cheapest, a gallon is US$1.864 and is one of nine states with average prices below US$2. The crude oil which makes up roughly half of gasoline prices was settled at US$58.24 for December 2008 delivery’.

If I were to use the conversion of one US gallon is equivalent to 3.7854 litres and one US dollar is equivalent to RM3.5965 as published by Bank Negara Malaysia on Nov 13, then one litre of gasoline in the US is only RM2.0446

According to the US Energy Information Administration , the gasoline price in the US for September 2008 consists of the crude oil at 67%, refining costs and profits at 14%, distribution and marketing costs and profits at 8% and taxes at 11%.

Assuming our Malaysian petrol does not have the tax component since it is a subsidised item and the percentage of the other components in US and in Malaysia are the same, then our petrol price should be RM1.82 per litre.

So even with the latest price cut down to RM2 per litre, we are still paying 10% more than consumers in US.

If I were to add the Malaysian government subsidy of RM0.30 per litre then the actual petrol price for Malaysia after the latest price cut is RM2.30. What is it that makes our petrol more expensive than in the US?

It is really a bad management to ask the rakyat to pay more than what they should and make money out of the sale of petrol just to fund the government projects especially during difficult times like now.

The government ought to reveal to the rakyat the components that make up the price for our petrol and diesel.

I would suggest that the government remove the subsidy and let the market determine petrol and diesel prices but set a minimum and maximum price that petrol stations can sell based on the average price of the previous week.

Meaning the minimum and maximum prices must be adjusted weekly and the difference between the minimum and maximum prices should not be more than 15%.

Perhaps the government should consider subsidy only when the petrol price goes beyond RM3 per litre.

With the latest price cut, the petrol price has fallen to almost the June 5 level while the diesel price at RM1.90 per litre is still 20% higher than the June 5 level.

Most of the transportation related costs that pushed up the prices of many consumer products are diesel related. And the costs for many raw materials were fixed when the diesel price was higher. Therefore, we cannot expect the prices of goods to fall to pre-June 5 level.

But that does not mean these prices should remain at the current level. Though it makes business sense to capture as much profit as possible at every opportunity presented, such a practice will not only hurt the consumers but in the long run, will also hurt businessmen.

So I sincerely hope that government will not make the rakyat pay more than what they should and make money out of the rakyat in this difficult times where many are being/will be retrenched.

I also hope businessmen will show their social responsibility by reducing their products’ prices where possible.