The New Petrol Subsidies Plan
As expected, the anouncement created a chaos and panic attack nation wide. Everywhere, people rushed to petrol station, as if, by doing so, they would be able to save SO much.
Yes, people, you deserve to be angry. But here are some points for us to ponder
1) Despite the increase of petrol price in Malaysia up to 78 cents per litre. The price of oil in Malaysia are still relatively cheap compared to other countries in the world.
2) Malaysia is still giving subsidies, in total worth of 30 cents per litre. On top of that each vehicle owner (2000 cc and below) will get a cash subsidy of RM 625 annually when they renew their road tax. For cars with 2000cc and above will get a road tax discount of RM 200.
3)Motorcyclist with vehicles up to 250 cc will get RM 150 cash subsidy annually. Bike with 250cc and above will get road tax discount of RM 50
4) With the reduction of petrol subsidies, the government will be able to save RM 13.7 billion annually, and that same amount of money will be used to subsidised food products.
The increase of oil price is unavoidable, because apparently oil is becoming a scarce natural resources, and due to that plus the economic recession in America, the price is going extra ridiculously high. Thus I shall say the price increase is reasonable.
As a civilised citizen, we should look at this from a positive angle. This is the time we should stand as one united nation, and hopefully we would be able to walk out of this global economic recession stronger than ever.
It is true that with every increase in Petrol price, there will be a huge increase in other things especially food. It is our responsibility to boycott those shops and reports them to the ministry in charge so that actions could be taken against them.
Put it this way, Malaysia is not going bankrupt or anything like that, it is just another difficult time for the nation, it will soon pass, if we stay united.
Even though I’m an economic conservative when it comes to subsidies, I still question the wisdom of the government in introducing a sharp increase in fuel price. A staggered increase overtime with a clear time frame is better.
Fuel subsidies started as an economic tool to attract investors coming in then it slowly became a social tool to help the poor, later it transformed into a political tool to remain popular. A political tool should be tackle politically.
The government should have introduced a Subsidy Policy long ago, I think we’re around 10 years too late. As it is, the financial burden is indeed too much for the government to bear. Other than fuel subsidies, the amount of spending and with it wastages really stretching thin our coffers. The government can and should reduce wastages.
We all know the figure, a big portion of government revenue goes to paying salaries and retirees. With a growing civil service (rumoured to be around 1.5 mil now) the financial burden will only be increasing. I suspect within less than 10 years time, the retiree scheme will be converted to and EPF model. If not, the financial burden will only get worst.