Oil or its more refined form, fuel!
That’s the now-talk in town, and hardly surprising so, because the government has partially reduced the subsidy. Bear this in mind please, the fuel at RM 2.70 per litre is STILL highly subsidized, where the true price per litre is more at RM 5.00 ..... that is, RM 5.00 for now as we may expect it to rise even further
The Malaysian government will have a torrid time playing catch up but … more later on the government’s action.
The pain for the ordinary bloke is considerable because what should have been done earlier, years, nay, a decade or so ago, was not. The government had allowed for too long an unrealistic extremely low fuel price so much so that when the necessity to remove this hefty chunk of unaffordable and inefficient expenditure from our national budget became an imperative, the effect (real and perceived) of the abrupt implementation invariably becomes tsunamic.
Didn’t Edward Young once say: “Procrastination is the thief of time”?
So everyone from Dr M to the great Anwar Ibrahim to Lim GE have either condemned or at best, criticized the government’s decision. In Malaysiakini Anwar Ibrahim, a former Finance Minister, predictably groaned Hike ‘wanton in size, callous in effect’.
But both Dr M and Anwar Ibrahim must share the responsibility of having the fuel subsidy in the first place, and allowing that to continue for years. It should have been gradually removed a dozen years ago.
Then, we mustn’t forget that Anwar had irresponsibly made an election campaign promise of lowering, yes bloody lowering the fuel price, let alone (impossibly) maintaining it at RM 1.92.
Malaysiakini reported: “… writing on the price hike in his blog, Anwar reiterated his personal as well as Pakatan's stand that the oil price will be reduced when they come to power. The promise to reduce oil prices was one which Pakatan capitalised during the general election.”
I highlight this to show two things, firstly, don’t believe everything Anwar promised or promises, and secondly, if he had really intended to lower the fuel rpice, we should also remember he was a lousy Finance Minister. Read this to see how he performed when he was Finance Minister.
Much as I am currently a DAP supporter, on this issue I find myself supporting the government in its (only partial) removal of the subsidy. At long last, finally!
As I stated earlier, the Malaysian government will have a torrid time playing catch up in its effort to remove the subsidy completely because the oil price continues to rise. But at least it has started something that should have been done eons ago. Still, better late than never.
But I want to know more details of what it has planned to mitigate the adverse economic effects on the poorer members of the rakyat. For example, Lim GE told Malaysiakini that “… the increase would punish the poor if rich companies continue to enjoy fuel subsidies especially the independent power producers."
The subsidized scheme was an inefficient system which had lent itself to cheating and benefitting only the big players. It was inequitable and thus had failed to play its role as a subsidy for the people’s benefit. If AAB still allows the big players to somehow benefit from his proposed mitigation scheme (details yet to be known), I’ll be pretty pissed off. Everyone must bear the pain together, especially the members of our society (corporate or private) who can afford it most.
As I had posted in an earlier article, the increased fuel price per se won’t dramatically affect the pockets of those with small engined vehicles, but I am worried about the downstream effect on essential goods, as transportation cost will definitely leap. And it won't do any good for the government to come out with its usual silly threats to force-control prices of essential goods, as price control and subsidization have been what got us into trouble in the first place.
One immediate relief is to dispense with road tax for small engined vehicles, ameliorate the insurance cost through a public insurance scheme, and various other fees that directly affect the poorer public members. The public transport system must be improved – in this area, the government must not allow creative concepts from the private sectors to be shackled by the CVLB or the constraints of the NEP.
Then there is that controversial issue - nuclear power! The government must seriously consider this option, and not leave it till, again, too late.
Yes, removal of the fuel subsidy had to be done, it has now been partially done, there’s more to be done – and it’s the good government which can come up with a sound equitable mitigating scheme instead of just cheap grandstanding unconstructive and provocative criticisms based on sheer bullsh*t.
(1) Fuel subsidy - who really benefits?
(2) Tony Pua, what say you on PKR's increased fuel subsidy?
(3) Oil & its cost - What to do about it?
(4) Fuel Price Increase - Blessing or Burden?