Malaysiakini Letter

Fuel price hike: Alternative suggestions

Har Wai Mun  |  Published:  |  Modified:

I believed that the fuel and electricity tariff increase was inevitable, despite repeat denials by the ministers before the 12 th general election. Nevertheless, the magnitude of the recent hike is rather shocking, so are the justifications given.

Comparing our petrol and diesel prices with neighbouring countries make no sense but is just rhetoric. Countless opinions from fellow Malaysian already voiced out that those neighbouring countries - especially Singapore - have much higher income per capita.

It has been reported that petrol and diesel prices in Singapore are respectively RM5.20 and RM4.22. Given the exchange rate of about RM2.40 for S$1, the mentioned prices in Singapore dollar would be S$2.17 and S$1.76 respectively.

Neutralising the exchange rate factor, those prices are much lower than Malaysia’s new petrol and diesel price of RM2.70 per litre and RM2.58 per litre respectively.

Our prime minister, Abdullah Ahmad Badawi asks the public to ‘change their lifestyle’ to ensure no wastage of resources. However, how about the ministers’ and government officers’ lifestyles? Talking about ‘waste of resources’, how many resources has our government wasted?

From the sports training centre in United Kingdom to the crooked bridge in Johor, who is wasting resources and public money? How about those findings from the auditor-general’s report?

In wake of this fuel and electricity tariff hike, inflation is expected with increases in taxi fares, lorry transportation charges, bus fares and food prices yet the domestic trade and consumer affairs minister claimed confidently there would be no spiralling effect.

Could the government take action to prevent these increases in fares or prices? If inflation is out of control, firstly, the yearly petrol rebates would definitely not be sufficient. Secondly, the hardcore poor that do not own any vehicle or motorcycle would not even get a single sen from the rebates.

Therefore, could this ‘subsidies restructuring plan’ work to the fairness to all? There could be alternatives and I would like to join the bandwagon of suggestions regarding this matter.

Firstly, if fuel subsidies are taxing on the government, I would suggest that the government heavily increase the road tax for private vehicles with high engine capacities (usually luxury cars and motorcycles).

Secondly, the government could increase the personal income tax of for the high income bracket to increase government revenue. Thirdly, I strongly agree that we should not allow foreigners from neighbouring countries to enjoy our subsidised petrol and thus would suggest government allow a higher price being imposed on them through differentiated pricing.

Lastly, Malaysia should adopt an appreciating currency policy instead of maintaining a low exchange rate to safeguard our export competitiveness. Imagine if our currency is S$2.40 to RM1!

Our initial RM1.92 per litre of petrol would cost the Singaporean a hefty S$4.61, hence dispersing their incentive to buy cheap petrol in Malaysia.

There could be many more alternative suggestions and opinions, including for government personnel to change lifestyles but the current announced ‘subsidies restructuring plan’ by the government is certainly not popular and is shocking to most Malaysians, except perhaps for Malaysian millionaires.

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