YOURSAY | ‘What do you think our government will do with the money saved?’

COMMENT | Getting a grip on fuel subsidies as oil prices surge

Coward: Petrol and diesel subsidies are one of the biggest distortions of the Malaysian economy.

It allows a good price to stay artificially low.

The outcome? It diminishes the urge and need to stay competitive by improving our overall skills to meet our improved expectations.

Our troubled state of corruption meant we push real prices artificially even lower by importing cheap labour to create opportunity for politicians to "earn" from the manipulated system.

Having said that, to argue that we can just switch from processing heavy crude from the Middle East to light crude we produce ourselves ignores the reality that we are not set up to process light crude.

The reconfiguration, while possible, will take months.

Moreover, light crude produces more petrol and jet fuel, and less heavy oil products like diesel and naptha, one of the most important feedstocks for industry.

Everywhere, diesel is the most important transportation fuel because the haulage of goods depends heavily on it.

As such, switching to processing our own crude is unlikely to be a good solution.

Building up reserves, coupled with diversifying sources and reducing dependency on crude oil, might be a better solution than consuming our own crude oil.

We are so dependent on subsidies, and our economy is so distorted that no politician dares to correct it.

What it takes is officially a big crisis to force through reform.

Short of that, they beat the time of ironically, just after the election, when politicians are least sensitive to voters' whims.

As such, I don't see any changes before the next set of elections.

In a weird sense, for reform to happen, we need this crisis to stretch beyond the next election to make it easier for politicians to take the plunge and reform the system.

Quad: Indeed, the case. It is just outright insane to keep the price of fuel, especially RON95, so highly subsidised.

Besides Brunei, all our neighbours or for that matter every other country, many less better off ones too, allow the price of fuel to float.

Little wonder that our public transportation remains in its current state. Keeping a lid on fuel prices is just a political play at the expense of the country.

Robbie98: Is Malaysia a net exporter of oil? A search will yield conflicting answers, but some facts are as correctly detailed by the author.

Ŵe used to produce 700,000 barrels a day some years ago. The diminished returns from existing fields produce only 350 to 400,000 a day now.

We bring in 700,000 barrels of crude oil for refinement here from the Middle East.

We consume domestically 700,000 barrels a day at present.

Malaysian crude oil is of better quality, but diminishing in yield.

Liquefied natural gas production is still good.

The subsidies before the present increase in crude oil price were approximately RM10 to 12 billion a year.

At the present price, the subsidy accounts for RM40 to 48 billion.

The oil prices are likely to go up, adding to the burden in the future.

So rational behaviour dictates that we have defined a selective subsidy.

Subsidise the poor, the transport industry, the gig economy, and essential public services.

Stop subsidising the people who can afford to pay. Oil is a diminishing resource. Improve public transport.

The government has misused and abused revenues from Petronas to date. Promote the use of electric vehicles and promote alternative energy.

GrayParrot9290: Simple thoughts on the subject:

1) Oil belongs to our country and our people, and all its revenue should benefit the people, not the government.

2) All subsidies used to subsidise the price also come from taxes paid by the people and businesses; it is not government money.

3) Malaysia has plenty of wealth and can balance its budget, but the government is wasting a lot of money via many unproductive government-linked companies (GLCs) and outright corruption, leakages, bailouts, and other factors.

Prime Minister Anwar Ibrahim, who is also the finance minister, is just clueless on how to manage our country's finances and too arrogant to let some capable person (regardless of race, creed or religion) manage it.

Very simple thought (yes, many factors to take into consideration as well as constraints), but it all boils down to the person to manage it and not blame external factors, which are beyond our control.

No Pakatan Harapan, no Perikatan Nasional!

Milshah: Iran has made it clear that one of its key objectives is for oil prices to reach US$200 (RM797.90) a barrel. They can’t fight the US militarily, so they attack where it will hurt the most, the US economy.

The US economy is very vulnerable to oil prices, and high oil prices will badly damage the US economy.

Iran also wants to do away with petrol dollars, such as using the use of the US dollar to buy oil, and instead use China’s yuan.

The aim is to dethrone the US dollar as the world's currency and destroy the US economy.

I am all for this, but the impact will also hit Malaysia. Is Malaysia ready for high oil prices and dethrone of the US dollar as world currency? We need to be prepared for the stormy weather ahead.

Expect stormy days ahead; the government should do well to coordinate with Asean, Brics and other global economic blocs in light of this.

We need to relook into the subsidy issue, the US dollar in our reserves, cost-push inflation and the reduction of usage of oil for domestic consumption.

On another note, Russia and China should intervene in this Iran war, as the US is crossing a red line by attacking civilian infrastructures, which is a war crime.

Drngsc: Malaysiakini columnist, P Gunasegaram, you are not being very fair here.

Yes, it is costing a lot, this subsidy, but the benefits to the people are also a lot.

I do not read of any attempt to work out inflation rates in Asean countries, or other measures to compare those Asean countries without subsidies with Malaysia? We must compare apples with apples, oranges with oranges.

It is never wrong when the government helps the people.

Hmmm: I am sure what you just said makes sense. We could probably save a lot of money if we did the right things. And then what?

What do you think our government will do with the money saved? More development, more hospitals, more schools, higher salaries?

Or just more corruption and wasteful spending?

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