Wednesday, June 04, 2008

Malaysia's Subsidy for Petrol Price

The current petrol price is RM1.92. After reading the article on Peak Oil, I have done an estimated calculation and I won't be surprised if it hit a minimum RM3.10 per litre in the month of August 2008 when the Malaysian government decides to reduce the petrol subsidy.

Friends are still saying that even after increasing the price of petrol in the month of August 2008, the government will definitely give this comment again "Our petrol price is still the cheapest in the region!". Right?

The government has advised us to change our lifestyle in accommodating the undeniable increase in petrol price. How will you change your lifestyle? What will you sacrifice? If your petrol consumption for each month is around RM300, be prepared to pay an additional RM300 by Sept 2008.

Why double it? Our Domestic Trade and Consumer Affairs Minister, Datuk Shahrir Abdul Samad, has already mentioned that petrol price will be an uncontrolled price item in August 2008 which means to say that it will be priced according to market price.

The funny thing about certain Malaysians is that they will continue to fall for rumours without checking further.

For those who read the newspapers or are updated via the relevant websites (e.g. Malaysiakini - Pump price at 'market levels by August'), it was stated clearly that the Malaysian government would decide on the new petrol price on Tuesday (yesterday) and today which would be implemented in August 2008. But Malaysians jam packed petrol stations yesterday to pump the last drop of petrol at RM1.92. All this because of rumours and SMS messages.

In the past petrol price increases, I didn't join the bandwagon with those who queued up to pump petrol as it would take ages just to get into the petrol station. My logic question is how much can you save with that bit of petrol for that night. It could range from RM1.00 to RM10.00 depending on the size of your petrol tank. The next thing these people will go to Setarbak for a cup of coffee priced at RM10.

I have just bought a new house which should be ready by Dec 2008. Looks like I may have to re-draw my renovation plan due to increase in material costs. No renovation but move in with current furnitures??????

The Malaysian government is so caught up with this petrol subsidy issue where it mentioned it was such a waste to pay off RM45 billion. The government should by all means concentrate on reducing corruptions and wastage in unncessary expenditures incurred by government departments / agencies as highlighted in the annual Auditor-General's reports. That itself is already a few billions. But no! But why?

By referring to the Auditor-General's 2007 report, the government did mention that necessary actions would be taken against government staff found to have breached the rules. Todate, no news.

Remember that the government did say that by increasing the petrol price, the petrol subsidy would decrease and that the savings on such subsidy would be used for improving the public transport infrastructure. Todate, the traffic has gotten worse and to top it off, the government has just announced that they would scrap off the subsidy provided to a major bus company providing bus transportations to the public. The bus company will definitely be increasing their bus fares to cover the loss of subsidy. Where are the savings going to then?

Last but not least, the impact of the petrol increase, if at all priced according to market price, will definitely trigger the price increase on every aspect of life.

Which business industry will be affected? I would say that the food, leisure and entertainment industry will be badly affected as people will try to eat common food or cook at home, spend more time at home watching those pirated DVD movies and lesser travels be it domestic or overseas.

This is what we call - stagflation - a case of rampant inflation and stagnant economic growth.
Are you ready for it?

Reading: KL govt to raise fuel prices to market levels - Malaysia Today

Related posts:-
* Show I/C To Pump Subsidised Petrol
* Is Malaysia's Fuel Price Cheaper?
Tags: Malaysia, Petrol Price, Fuel Price, Petrol Subsidy, Peak Oil, Stagflation

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2 Comments:

Blogger Buzzing J said...

I'm ready. I've already got a bicycle. Just have to figure out how to fit in 2 adults, 2 children, 2 brief cases, 2 school bags onto the petrol-free machine at the same time. :)

04 June, 2008 16:27  
Blogger Johnny Ong said...

i think you will need additional licence to carry that many people / stuff. for that matter, lots of application need to be submitted

04 June, 2008 18:35  

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