In Reply to: economists please advise this logic posted by albert on Friday, 7. October 2005 at 08:59 Bali Time:
Without going into the % you quoted,.... but a short explanation is:
The fact that fuel has gone up by a certain % and the% increase in taxi fares,....what the fare increase must cover is more than that of just the fuel costs.
The large increase in feul cost flows onto everything, eg the cost of living,...so those driving the cabs those owning the cabs will be paying more for just about everthing they buy or use,...
The same as the increase in fuel costs in Australia,.. while it may cost you only $20 a week extra to run the car,...your cost of living goes up more than that,.. as all services and you weekly cost of living also goes up,.. so if given only a $20 pay rise you would still be out of pocket.
Hope that helps
PS you'll also find petrol (in Indonesia) was also increased last March for memory so also maybe a little catch up