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Economy 101: 30 Cents Fuel Price Increase – Time to Boycott Some Restaurants

restaurant price increase

When the announcement on the fuel price was made, the Indian Restaurant near my work place lost not time increasing the food prices.

It cost us more now for breakfast and lunch at this restaurant now  – teh tarik went up from RM1.00 to RM1.20, burger up by another 20 cents and roti canai up by another 10 cents. Every item on the menu went up by 10 – 20 cents.It outraged some patrons that they called Malay Mail and complained about it.

In response to the complaint, the Domestic Trade and Consumer Affairs Ministry’s enforcement director Abdul Rosik Takub informed they will be visiting the restaurant soon. He said “We do not condone food outlets overcharging customers.”

We were happy to note that restaurant will not getaway with such an arbitrary increase in price but reading between the lines in the paper, we also noted that there was catch in the Rosik’s statement.

He said “Although prices of cooked food are not controlled, all food outlets are required to display price tags. If the prices charged are different from the price tags, then the outlets have committed an offence” He said that if the restaurant is found to have violated the price directive, action can be taken against it.

The problem was the restaurant owner was also fast enough to “update” the price list with the new prices. So, I don’t think Rosik will be able to book the owners for the increase of food price. At the most, Rosik can only give a friendly pep talk to the restaurant owner whilst having his teh tarik and roti canai.

I put myself in the restaurant owner’s shoes and thought for second on what will cause me to increase the food price. Increase in LPG price? I cook more means I use more LPG means I pay more? Yes, sound reasonable since LPG went up 30 cents per kilogram. But is it worth the 10 – 20 cents increase on all the food prices?

Let’s do some “kindergarten” maths, shall we? All figures are on a “wildest imagination” assumption and also assuming that the only increase in expenses is for fuel and LPG (other “raw” items have increased too, I understand).

Before the increase:

RM30 for petrol (say to go to market and back) and RM17.40 for one 12 kg LPG cylinder and let’s that it is sufficient to make 50 teh-tarik and 50 roti canai (Malaysian favorite past time food mah). So at RM0.80 per roti canai and RM1.00 per glass of teh tarik, there is an income of RM90.00 against expenses (petrol & LPG) of RM47.40. That gives a gross profit of RM42.60 per day (fine with me)

After the increase (with 30 cents up for fuel and LPG):

It is now RM35.56 for petrol (again to go to market and back) and RM21.00 for one 12 kg LPG cylinder in order to maintain the same 50 teh-tarik and 50 roti canai per day. So at RM0.90 per roti canai and RM1.20 per glass of teh tarik, there is an increased income of RM105.00 against expenses (petrol & LPG) of RM56.56. That gives a gross profit of RM48.44 per day.

Did you see the kill?

The gross profit went up by RM5.84 per day! Now multiply that with 31 days gives you a comfortable kill of RM182 per month. Not much, you say but remember that restaurants don’t sell food for RM105 per day. My estimate is that they sell at least RM500 or more. Further, the price of every item has gone up by 10 – 20 cents.

So no matter what you take, you are paying more. I would have understand this if the restaurant would have increased the prices as to maintain the same profit margin but here, they are not only maintained the margin, they managed to increased it too. All in the name of “sorry lah boss, harga minyak sudah naik, semua harga pun naik

The restaurant was indeed making a big kill with their increase price and since there is little the Ministry can do to stop them, we decided on one action. That is to boycott the restaurant.

Other restaurants nearby are still selling at reasonable price. This even so, when these restaurants saw an increase of customers (going for cheaper price) and are intend to maintain them as regular customers (food with cheap price and good taste is always welcomed by all of us here)

Rakyat lose RM0.30, the Government save RM0.30 but the restaurants like the one near my workplace makes the profit of….who knows? Until then, the boycott continues, I may even opt to “ta-pau” food from home.

(Filed under Tag: Money)

See also: What’s with 30 cents increase?

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