Hornbill Unleashed

October 3, 2014

Another fuel hike but where is the saved subsidy going?

Filed under: Politics — Hornbill Unleashed @ 8:00 AM
Tags: , , , ,

Sonia Ramachandran

At a time when other countries who are not oil producing are reducing prices of fuel, Malaysia is doing the opposite.

The BBC reported that three major United Kingdom supermarkets, namely Sainsbury’s, Tesco and Asda cut the prices of petrol and diesel starting Sept 30.

The report stated that a drop of up to five pence per litre was announced by Sainsbury’s and Tesco while Asda said it would reduce petrol by up to one pence and diesel by two.

On Sept 30, the Times of India reported that diesel prices in India is likely to be cut by about Rs1 per litre while petrol price may be slashed by Rs1.75.

At home, however, the Domestic Trade, Cooperatives and Consumerism Ministry announced that the price of RON95 and diesel fuel will go up by 20sen effective Oct 2 with the new pricing for RON95 being at RM2.30 per litre and diesel fuel costing RM2.20 per litre.

Federation of Malaysian Consumers Associations (Fomca) president Datuk Dr Marimuthu Nadason told theantdaily that Malaysians have to start being realistic and not expect fuel prices to remain stagnant.

“Look at the global scenario. You want your salaries to increase every year but you expect the petrol prices to remain stagnant. I’m not defending the government but you must be realistic in life. We can’t be “katak di bawah tempurung” (ignorant) anymore.


“Eventually the government must reduce subsidies so the money saved can go towards things like public transportation, education, health and food security. For me, as long as the hardcore poor are protected, I’m happy about it. Looking at the way middle-class Malaysians spend, this increase is nothing,” he said.

What is crucial, said Marimuthu, was ensuring the money saved is channelled back, especially into public transportation.

“Look at the UK, 97 per cent of the fares they collect from public transport is invested back in public transportation,” he said.

The move to increase prices is reportedly in line with the government’s subsidy rationalisation plan.

“Despite the increase, the government will still need to spend more than RM21bil on fuel RON95, diesel and LPG (liquefied petroleum gas) subsidies for this year.

“This move is in line with the subsidy rationalisation plan by the government to ensure that the country’s finance remain strong,” the ministry was quoted as saying in a statement on Oct 1.

The statement added that government aims to further curb the smuggling of fuel by irresponsible quarters and to ensure there is no misuse of the current subsidy.

“The government will continue to implement the subsidy rationalisation in stages so as to not burden the lower income group.

“We understand that fuel price increase will affect the economy and the people. Therefore, we will continue to provide incentives to the lower income group to alleviate their burden,” said the statement.

The last time the government increased prices of fuel was on Sept 3, 2013 where it raised prices by 20 sen to RM2.10 for RON95 petrol and diesel to RM2, up from RM1.90 and RM1.80 respectively.

Slightly more than a year later, the price has gone up by yet another 20 sen.

The worrying thing about fuel prices increasing in Malaysia is the domino effect it causes where everything across the board, including ice water and plain rice, seeing an increase.

With the Goods and Services Tax (GST) coming into effect in April 2015, there will be another six per cent added on to the increased prices of most everything.

The other aspect is the fact that driving is a necessity in Malaysia due to the unreliable public transportation system in the country.

Locals thus can’t even fall back on that if they choose not to drive.

As Malaysians prepare to bid adieu to 2014, a tightening of fiscal belts seems also inevitable.

1 Comment »

  1. Under BN, we are now amongst the best in the world for the following:
    1. corruption;
    2. power abuse;
    3. money laundering;
    4. terrorist breeding;
    5. human trafficking;
    6. drug trafficking;
    7. radio active waste dumping ground;
    8. human right abuses;
    9. exam papers leaking;
    10. education system plunging;
    11. wastage of public fund;
    12. jet engine missing;
    13. jumbo jetliner missing;
    14. submarine not sinking;
    15. ‘Allah’ word copyright & monopoly;
    16. gangsterism, hooliganism, racism, bigotry;
    17. selective prosecution;

    18. discrimination, oppression, repression, intimidation; 19. lies, deceit;
    20. etc……………………….
    Welcome to the land of endless possibilities. We should be proud to be Malaysians under the current regime. At least now the world knows we exist, never mind if it’s for the wrong reasons. Kudos to our leaders for putting our country on the world map. We owe it to you for the embarrassment and shame brought upon our nation and us.

    Comment by Vinoo — October 6, 2014 @ 5:37 PM | Reply

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