Can fuel price go down? Your guess is as good as mine…

I’ve received this e-mail a few days ago. It’s logical & may work, read on…

A man eats two eggs each morning for breakfast. When he goes to the Kirana store he pays Rs. 12 a dozen. Since a dozen eggs won’t last a week he normally buys two dozens at a time. One day while buying eggs he notices that the price has risen to Rs. 16. The next time he buys groceries, eggs are Rs. 22 a dozen.

When asked to explain the price of eggs the store owner says, ‘The price has gone up and I have to raise my price accordingly’. These store buys 100 dozen eggs a day. He checked around for a better price and all the distributors have raised their prices. The distributors have begun to buy from the huge egg farms. The small egg farms have been driven out of business. The huge egg farms sell 100,000 dozen eggs a day to distributors. With no competition, they can set the price as they see fit. The distributors then have to raise their prices to the grocery stores. And on and on and on.

As the man kept buying eggs the price kept going up. He saw the big egg trucks delivering 100 dozen eggs each day. Nothing changed there. He checked out the huge egg farms and found they were selling 100,000 dozen eggs to the distributors daily. Nothing had changed but the price of eggs.

Then week before Diwali, the price of eggs shot up to Rs. 40 a dozen. Again he asked the grocery owner why and was told, ‘Cakes and baking for the holiday’. The huge egg farmers know there will be a lot of baking going on and more eggs will be used. Hence, the price of eggs goes up. Expect the same thing at Christmas and other times when family cooking, baking, etc. happen.

This pattern continues until the price of eggs is Rs. 60 a dozen. The man says, ‘There must be something we can do about the price of eggs’. He starts talking to all the people in his town and they decide to stop buying eggs. This didn’t work because everyone needed eggs.

Finally, the man suggested only buying what you need. He ate 2 eggs a day. On the way home from work he would stop at the grocery and buy two eggs. Everyone in town started buying 2 or 3 eggs a day. The grocery store owner began complaining that he had too many eggs in his cooler. He told the distributor that he didn’t need any eggs. Maybe wouldn’t need any all week.

The distributor had eggs piling up at his warehouse. He told the huge egg farms that he didn’t have any room for eggs would not need any for at least two weeks.

At the egg farm, the chickens just kept on laying eggs. To relieve the pressure, the huge egg farm told the distributor that they could buy the eggs at a lower price.

The distributor said, ‘ I don’t have the room for the %$&^*&% eggs even if they were free’. The distributor told the grocery store owner that he would lower the price of the eggs if the store would start buying again.

The grocery store owner said, ‘I don’t have room for more eggs. The customers are only buying 2 or 3 eggs at a time. Now if you were to drop the price of eggs back down to the original price, the customers would start buying by the dozen again’.

The distributors sent that proposal to the huge egg farmers but the egg farmers liked the price they were getting for their eggs but, those chickens just kept on laying. Finally, the egg farmers lowered the price of their eggs. But only a few paisa.

The customers still bought 2 or 3 eggs at a time. They said, ‘when the price of eggs gets down to where it was before, we will start buying by the dozen.’ Slowly the price of eggs started dropping. The distributors had to slash their prices to make room for the egg coming from the egg farmers.

The egg farmers cut their prices because the distributors wouldn’t buy at a higher price than they were selling eggs for. Anyway, they had full warehouses and wouldn’t need eggs for quite a while. And those chickens kept on laying.

Eventually, the egg farmers cut their prices because they were throwing away eggs they couldn’t sell. The distributors started buying again because the eggs were priced to where the stores could afford to sell them at the lower price. And the customers starting buying by the dozen again.

Now, transpose this analogy to the gasoline industry. What if everyone only bought Rs 200.00 worth of Petrol each time they pulled to the pump? The dealer’s tanks would stay semi full all the time. The dealers wouldn’t have room for the gas coming from the huge tanks. The tank farms wouldn’t have room for the petrol coming from the refining plants. And the refining plants wouldn’t have room for the oil being off loaded from the huge tankers coming from the oil fiends. Just Rs 200.00 each time you buy gas. Don’t fill up the tank of your car. You may have to stop for gas twice a week, but the price should come down.

Think about it!

6 thoughts on “Can fuel price go down? Your guess is as good as mine…

  1. & the saga continue….. once u lied, u can’t stop lying… he is consistent…

    “KUALA LUMPUR: The Government is not planning to announce the new fuel prices before polling day for the Permatang Pauh by-election. Prime Minister Datuk Seri Abdullah Ahmad Badawi said the Government would stick to its decision to announce the new prices on Aug 31, to be enforced on Sept 1. He was asked if the Government would announce the new prices before polling day as pre-empted by certain quarters….” Quoted from the Star 21/8/08 –> http://thestar.com.my/news/story.asp?file=/2008/8/21/nation/22138409&sec=nation

    and today;

    “PUTRAJAYA: Petrol and diesel price will drop by between eight sen and 22 sen a litre from Saturday. The price of RON97 petrol will be reduced by 15 sen to RM2.55 a litre from RM2.70, while RON92 would be 22 sen less at RM2.40, from RM2.62….” check full text here –> http://thestar.com.my/news/story.asp?file=/2008/8/22/nation/20080822182712&sec=nation

    sigh… really sick of all his lying!!! everytime!! why must he lie? can’t he just say no comment ot whatever? Islam Hadhari? come on lah… how can i look up on you? what A BIG FAT LIAR!! on another note, the move is appreciated..

  2. ‘pakcik’ tu dah nak turun takhta..
    sure tido lagi lena
    kejut pun tak guna
    entah2 lena terus ke alam barzakh..

  3. biasa la… ntah sedar ke tak, harap ada orang tolong ‘kejutkan’ pakcik tu dari lena dia… membuta je tau hehehehe

  4. harga minyak luar negara dah turun tapi Govern still tak umumkan penurunan harga minyak di Malaysia. kalau naikkan harga minyak bukan main cepat lagi!

  5. the writer also suggested not buy anything else at the fuel station i.e don’t give them any more of your hard earned money than what you spend on gas, until the prices come down… but IMO it’s a little bit unfair coz they need to survive also… yes, in a long run it is possible to apply this concept on a country with floating fuel price but not sure if it can give any significant impact in Malaysia (fixed price)… it’s a global issue anyway (demand decrease = price go down)

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