Filed in Current Affairs, Hong Kong

The price of petrol has just gone up in Hong Kong; again. We're now paying HK$12.66 per litre for normal grade petrol and HK$13.44 for high grade petrol. It's very expensive here but the oil companies don't mind increasing the price every chance they get anyway.

The latest excuse for increasing the price was the world wide cost of oil which recently hit US$61 per barrel, possibly the most expensive it's ever been. It's good and it's bad.

Caltex & Esso

It's good because it means that people will be more conscientious about the cars they buy and how much petrol they consume. It's good because more people will begin buying hybrid cars which are more environmentally friendly but still a little more expensive than a straight petrol burning car. It's good because institutions and companies working on engines that burn water rather than petrol will have more funding and more opportunities to finish their developments and release the final product onto the market.

It's bad because it's affecting the world economy. With higher oil prices, the only winners are the oil distributors and drilling companies. Everyone else loses. Companies' profits decrease. People have to spend more on petrol leaving less for other purchases. Overall, people have less to spend and that hurts the economy and everyone working within the economy. That's why the stock market is still not returning to healthy normal levels; although healthy might not be the proper word to use for a market where almost every company is over-rated.

Current petrol prices For years, we have heard rumours of people, inventors and companies who have worked on alternative engines, who have made progress and then been either bought out by the oil cartels or assassinated by the oil cartels when they refused to sell their inventions. Today's world is probably twenty years behind what it could have been in technological advancement if all of the world's inventions were allowed to be used and produced, including countless inventions not related to engines. Has anyone heard of the light bulb invented in Japan that doesn't burn out? No replacements needed. That was bought out real quick.

Another rumoured invention was that of an advanced passenger aircraft invented by a scientist in Holland, apparently for the U.S. government. The aircraft used advanced technologies to fly from Europe to the U.S. in just a few hours. That kind of invention wouldn't last long in today's world though. With all of the airlines heavy in debt paying large mortgages on their current aircraft, the last thing they'd want to see is a new airline using planes that can fly four times faster for the same price. They'd all be out of business quicker than you can fry an egg, and the banks holding their mortgages definitely wouldn't like that. Boeing wouldn't like it either and since they're best friends with the U.S. government, nothing that could hurt Boeing's earnings would be allowed onto the market without a major war.

HK$12.66 is a lot of money to pay for petrol. Our car is a very comfortable albeit slightly ageing car with a three litre engine. To drive my wife to work in the morning costs around HK$83 including tunnel fees. That's a little shocking. It's no wonder smart people use the public transport here when they can. Add to that the cost of parking should you want to park your car at or near the office and you'd need to be a millionaire to survive through the year.

As a rule, there is no free parking in Hong Kong unless you're in the countryside. Parking in the city costs anywhere from HK$20 to HK$30 and more per hour. A few car parks even charge HK$50 per hour. That's a lot of money. During SARS and the economic depression, people stopped driving so competition began increasing among car parks. Consequently, a few things occurred. First, the hourly fee came down; just a little. Second, the car parks began using deceptive advertising. Their fee boards at the car park entrance would show the fee in large friendly letters. It was only after turning into the car park enough that you couldn't back out again that you would discover that the large friendly fee was per half hour, not per hour. It's now common for all car parks to advertise half hour fees rather than hourly fees. In some ways, it's good for the drivers because we can pay per half hour rather than per hour. Overall however, it's still more expensive than it used to be. Some car parks are now charging per quarter hour with a minimum charge of one hour. That gets rather complicated to calculate if you're in a hurry.

The charge-per-half-hour method used by the car parks is similar to the deceptive pricing methods used by the local supermarket chains, most notably ParknShop; owned and run by the infamous Li Ka Shing. They frequently put products on 'special'. If they change the prices frequently enough, people lose track and begin to think the prices really are special when they've actually been increased. My wife and I only buy a few things from ParknShop so we have excellent mental tracking of the prices. For some products, we watch for the fair dinkum discounts and then buy enough to last until the next discount; for example, washing powder and long life milk (fresh milk is way too expensive here).

Everybody loves to increase their prices. The local banks just announced service charge increases due to 'increasing operation costs' even though they continue to profit billions of dollars every year (which is why we keep our savings in bank equities rather than bank accounts). Oil companies increase their prices all the time, usually in response to crude oil price fluctuations. Unfortunately for us, they almost never decrease their prices, even when the crude oil prices fall. Anyone want to guess what the oil companies will do should the crude oil price come back down to US$50 per barrel?