Malaysians just got hit with a knock out blow….a 41% increase in fuel costs!
Picture Credit: Google Images
I have often commented on the pf blogs that the fuel prices in our country are one of the cheapest in the world. After all, we are a net exporter of oil.
We were assured by our political masters earlier this year that there would be no fuel price increase, despite the regular news on the spiralling costs in the international market.
Our Government has often talked about the humungous amounts the Government was bearing in the form of this subsidy. A sort of “we are looking after you at great costs” kind of PR mumbo jumbo.
On the stroke of midnight, the 4th of June 08, the prices were raised by 41%.
Some people may say that this is still cheap by international standards. In fact our Government takes great pains to compare fuel prices against those of neighbouring Thailand and Singapore. However a large number of Malaysians have different views.
For one, we pay huge amounts in car duties. Our mouths water when we compare our car prices with car prices in other countries except Singapore (which has an excellent public transportation system.)
The opportunity cost per annum due to these duties should be enough to pay for fuel costs, without touching the principal.
Secondly, when the prices were increased the last round, we were all promised that the “subsidy saved” would be used to improve public transport. If I am not mistaken, the savings were in the region of RM6 billion. That’s a lot of money! I have not felt or seen this improvement yet.
Maybe the fact that, at the last elections held on March 8, the ruling Government lost its customary two thirds majority in Parliament (which gave it a clear run to amend the Constitution and pass any law they wanted with impunity) had something to do with this.
This act has also unleashed a horrendous tsunami of price increases all around. Transportation costs, food costs, any costs for that matter will be raised in the coming days. Needless to say, it started immediately and will continue for some time to come.
I think that many Malaysians have grave misgivings over this drastic increase and the likelihood that the savings from these subsidies would be frittered away on wasteful projects. I share this view.
This Government is just 3 months into its term. Nevertheless, I suspect that memories of this increase will remain in the minds of most of us for the next 4 odd years, when the Government will next face the electorate.
Luckily my family and I have some shelter as we have the main family car running on NGV, the price of which has been left unaffected. I have written about fitting our second car with a NGV kit but have yet to do so. For now, the fit out shops will be overflowing with business and there should be long waiting lists. I have to revisit this a little later.