Steven Sim

Kit wrote: A Really Hefty Price Increase

Should be a “basi” (”gone bad”, i.e., outdated) news by now…I received an sms just slightly before 6pm from a friend in KL informing the increase and by 6.30pm, I’ve received calls from people frantically trying to verify the relatively extorbitant price they will be paying today compared to yesterday.

While I think I’ll let the old man Lah (that’s Pak Lah in Malay lah) slip this time for reducing federal government’s subsidy or increasing the price (whichever way you see it) of oil, I disagree with the implementation part.

Firstly, by increasing a crazy RM0.78 (~USD0.24) at one go, the federal government had pressed the ultimate panic button in many people. This morning’s paper reported chaos at petrol stations around the country due to vehicles queing up for a final fill of cheaper petrol (RM0.78 cheaper!). I did a quick check at two petrol stations near my house and it was jammed to the brink, in fact cars were lining up along the road outside the stations. One of my friends when called told me he was lining up for petrol. It’s like petrol armaggeddon. The sudden surge will create panic not only among the consumers but across the market as I am sure other providers of products and services will rush to raise their prices as well (the busses and lorries are already making statements of price increase in today’s news). Why can’t we do a staged increase up to the end of the year? I am sure it is better than giving us back RM625 at year end taxation - btw, I tak layak (not qualified) for the RM625, darn. Or is the federal government “making up” for the past few years of subsidizing all at a sudden go?

Secondly, I question the fact that our petrol price needed to be raised up to almost 41%. The Star today gave a table comparing prices in neighbouring countries, Thailand, Singapore, Indonesia and India. All the prices were higher than ours, except Indonesia which is almost RM0.70 cheaper. That we are comparing prices with non petroleum exporting countries, except of course Indonesia, is conspicuos, at least to most of us. I received a list of prices/litre of petrol in petroleum exporting countries around the world, and was shocked to find all of them kept petrol prices way below even our former RM1.97. I did a quick check on the internet and found that the data to be very likely reliable (read: trust at your own risk) except perhaps Nigeria where the price shown is probably outdated by 3 years.

So the question in my mind is, is the 41% increase justifiable? And UMNO goody two shoes Shahrir Samad said we are to expect a market level price by August. Singapore which has 5 times our per capita income and NO PETROLEUM pays less than twice the price of our petrol now. Darn, they’ve got good salary and cheaper petrol price and we’re stuck with low pay, higher petrol price and a bloody piece of ROCK off Johor somewhere . Old man Lah needs to do more than slap us in this sadistic way and just say, “We can’t satisfy everyone“. 

Thirdly, on the RM13.7 billion saved each year from reduction in oil subsidy and revenue from palm oil windfall tax, we have yet to see how this will actually help the Rakyat, especially the poor and lower income group - or even young executives like most of my friends who earn just slightly above average but were taxed like some rich taukehs (bosses). There were no substantial plans and proposal on the usage of the RM13 billion other than a few mentions of improving food price and policy. The RM650 tax rebate which was reported over the news as will be sent to tax payers via errr…money orders after they pay their road tax cannot be seen to help substantially to cushion the impact of the price increase to a majority of the Rakyat. Only those with vehicles below 2000 cc will be given the rebate. What about the majority of the lower income group which do not own a car but will be similarly affected by the hefty surge of petrol price especially in other consumer products and services?

And what will RM650 do to most people with a kancil or a proton iswara (most of which are again lower to lower middle income group). I estimated there will be an increase of at least an average of RM1000 a year for an 1.3 iswara traveling to and fro the Penang bridge at rush hour to work on weekdays and where public transport is helplessly dismal. That is excluding any extra travels for leisure and weekends. This means another RM100 or so forked out per month to feed the car or about 6-7% of average monthly income of a fresh graduate working in one of the factories in Penang (some people are earning only RM1500/month fresh from university). 

And fourthly, the petrol ban on foreigners have been lifted today. Sharir Samad said no worries, “Malaysians can ENJOY rebates which they will get WHEN renewing their road tax” (The Star 5-06-08, p N4). Dude, see above point three. That means Sharir Samad and the federal government have no concern for the majority of the Rakyat since their welfare was not in the government’s plan when annoucning the petrol price increase. And interestingly, who will benefit from the lift of the ban? My friend E always say, Harga minyak meningkat tidak membebankan Rakyat…Singapura (The increase of oil price does not burden the People of … Singapore). But I think joke aside, the petrol station operators will have a field time. The federal government obviously was siding the interest of petrol station operators more than anybody else with the lift of the ban. I mean, why can’t they (the operators) being Malaysians share the burden of the impact of world economy by sacrificing businesses from neigbouring countries? What happened to the angkat tolak masuk picit? Their operational cost can be reduced with the implementation of self service. Nowadays I see up to two attendants per pump at certain stations (and mostly foreign workers). Why are the business owners the ones getting more (unfair) perks in difficult times?

I’ll leave the serious economics to the expert - DSAI, Tony Phua, pls say something - I am contented to speak from the perspective and FOR the sake of women and men on the street. If the federal government can put a ban today and lift it almost without notice the next, I am sure they can still do something with their blunder of petrol price increase implementation.

I call on the Pakatan Rakyat State Governments and MPs to issue a protest against the federal Government’s careless policy and that the Pakatan Rakyat should immediately form a consultation to study and publish an alternative petrol policy.

I hope the Rakyat will also remain calm in times like this. If any groups wishes to organize peaceful protest, please do it errr…peacefully. But then again, it’s the petrol armageddon after all…

p/s:
Btw, the reason why I said I agree with the price increase is well articulated by people smarter than me in this area, here, though I believe a reasonable subsidy is not merely populist but also a necessary policy for national economy, especially for developing country like ours so that we can blanket a little the rising cost with the relatively slower increase of income.