FOMCA (Federation of Malaysian Consumers Association) today President N. Marimuthu asks Malaysians to thank the Government for its pledge not to raise fuel price further, at least until the end of this year.
According to FOMCA, the increase from RM 1.92 per litre to RM 2.70 per litre is justified because the last time the Government raised fuel prices, the world oil price was just over US$60 per barrel (as against to US$ 132 per barrel now).
That is precisely the point raised in Malaysia Network in our article yesterday. If US$132 per barrel equals RM 3.45 (non-subsidised rate according to our PM), why should the subsidised rate be RM 1.92 back in February 2006?
Without the Government lending us crutches, the pump price should have been RM 1.70 - RM 1.75 per litre max. However, the price back then was at RM 1.92 per litre, with Malaysians seemingly even paying a premium for every litre pumped into their vehicles, let alone getting subsidies.
Yet, the Government then claimed that they can no longer afford giving subsidies at this rate. Apparently, 4 Billion will be saved for investments in public transport. Today we know we are far from what was envisaged by our leaders back then.
The President of FOMCA is certainly not a fan of Malaysia Network. Or else, he would have known that the reasons (comparing price of world oil back then and price of oil today) he used for calling the Government's price hike justifiable is only going to bring him gross embarassment.
FOMCA as its name suggests should be the ambassador and custodian for Malaysian Consumers. They should be one of the loudest voice expressing disagreement for the price hike as it will spark a spiralling frenzy on prices of consumer and essential items.
Any price hike is against the interest of consumers and FOMCA would have done better as an advocate and defender of consumer interest, or non-partisan at the very least. His statement may draw the thumbs up from certain quarters but double thumbs down from Malaysians.
Perhaps, FOMCA's statements should be forgiven as it is typical of the common syndrome suffered by Malaysians - the "Optimistic Denial Syndrome" a.k.a. ODS. ODS sufferers maintain an optimistic view either for the purpose of consoling oneself or pleasing others, despite undeniable and undisputable failure that has occured.
Using sports as an example. Despite our National Team losing critical matches (in whatever sport), very often there will always be certain people who will pain an optimistic picture, no matter how bad the defeat. "Its a close defeat", "We fought well but lost", "Our boys gave it their all but end up losers" are trademark statements of ODS sufferers.
ODS sufferers have a natural (or sometimes intentional) inability of distincting what is good and what is bad, what is favorable and what is not favorable. FOMCA may or may not be suffering from ODS but issuing a statement that goes against the spirit of the organization itself does leave a very bad taste.
It is hoped that before making public statements, a public figure as prominent as the FOMCA president should first ensure that its stand is for or against the principles of the organization he represents. Furthermore, using justifications that will only "boomerang" back as a source of embarassment should be avoided at all costs.
Having listened to his statement today, I, for one, would not hesitate to make a firm stand that FOMCA does not represent my sentiments and welfare as a consumer. I'm not part of what he represents, period. What about you?
Thursday, June 12, 2008
Wednesday, June 11, 2008
MALAYSIANS PAYING PREMIUM FOR PETROL SINCE 2006?
Prime Minister Abdullah Badawi has just announced that the price of fuel will remain for the rest of 2008. The Government will not budge even the market price breaches the US$ 200 per barrel mark.
Once again, the PM took the trouble to explain the RM 0.30 per litre formula, announced last week.
According to the PM, the full market price of fuel should be RM 3.45 per litre based on today's international price of US$ 132 per barrel. Therefore the pump price for July should actually be RM 3.15 per litre, the nett price after deducting the subsidy of RM 0.30 per litre.
We are supposed to be grateful as we are actually getting a very attractive deal now because the Government will maintain the pump prices at RM 2.70 till end 2008.
This means our poor Government has to fork out a subsidy of RM 0.75 per litre (RM 3.45 - RM 2.70) now, more than double the RM 0.30 per liter the Government was initially willing to spend.
Let's do the simple maths now. If the non-subsidised price should be RM 3.45 per litre when the international market price is at US$ 132 per barrel, this means the pump price should be about RM 1.70 if the price per barrel is US$ 65 per barrel. Agree?
US$ 65 per barrel was the international market price of crude oil when the our domestic pump price was raised from RM 1.62 per litre to RM 1.92 per litre back in February 2006!!!
Looking at this simple analysis, does this mean we were already paying a price that was higher than the market price even back in February 2006?
Even without a single cent of subsidy, the price per litre should have been RM 1.70 but we paid RM 1.92 instead. Based on the same basis of calculations, we paid the market price, plus a RM 0.22 per litre as premium!!!
The Government then claimed that the subsidy was unbearable and eating into the development funds. The increase was justified on the basis that it will help save RM 4 Billion that will be used for improving the public transport.
How would there be savings if the public is already paying the full price at the pump plus additional premium of RM 0.22 per litre.
Something must be wrong somewhere. The figures given to us just don't seem to match up at all. Perhaps, someone up there is feeding errorneous information to our PM. Can someone help us solve this mathematical mystery?
No wonder a certain opposition leader is so confident of reducing the fuel price if voted into power. Now we know its no longer a probability, possiblity but an absolute certainty!
Once again, the PM took the trouble to explain the RM 0.30 per litre formula, announced last week.
According to the PM, the full market price of fuel should be RM 3.45 per litre based on today's international price of US$ 132 per barrel. Therefore the pump price for July should actually be RM 3.15 per litre, the nett price after deducting the subsidy of RM 0.30 per litre.
We are supposed to be grateful as we are actually getting a very attractive deal now because the Government will maintain the pump prices at RM 2.70 till end 2008.
This means our poor Government has to fork out a subsidy of RM 0.75 per litre (RM 3.45 - RM 2.70) now, more than double the RM 0.30 per liter the Government was initially willing to spend.
Let's do the simple maths now. If the non-subsidised price should be RM 3.45 per litre when the international market price is at US$ 132 per barrel, this means the pump price should be about RM 1.70 if the price per barrel is US$ 65 per barrel. Agree?
US$ 65 per barrel was the international market price of crude oil when the our domestic pump price was raised from RM 1.62 per litre to RM 1.92 per litre back in February 2006!!!
Looking at this simple analysis, does this mean we were already paying a price that was higher than the market price even back in February 2006?
Even without a single cent of subsidy, the price per litre should have been RM 1.70 but we paid RM 1.92 instead. Based on the same basis of calculations, we paid the market price, plus a RM 0.22 per litre as premium!!!
The Government then claimed that the subsidy was unbearable and eating into the development funds. The increase was justified on the basis that it will help save RM 4 Billion that will be used for improving the public transport.
How would there be savings if the public is already paying the full price at the pump plus additional premium of RM 0.22 per litre.
Something must be wrong somewhere. The figures given to us just don't seem to match up at all. Perhaps, someone up there is feeding errorneous information to our PM. Can someone help us solve this mathematical mystery?
No wonder a certain opposition leader is so confident of reducing the fuel price if voted into power. Now we know its no longer a probability, possiblity but an absolute certainty!
Tuesday, June 10, 2008
My Oh My...Goodness Gracious Me!
In less than 24 hours, the Domestic Trade & Consumer Affairs Minister "flipped, then flopped". It was only a day ago the same Minister said that the price of fuel will remain at least until March 2009 as it is unreasonable to review the prices further.
"Of course, if the price of the international market exceeds US$ 200 per barrel, then we also give up lah", he said.
Although we should remind ourselves again and again that the higher the price of oil, the better it is for our country's coffers, it was nevertheless a welcoming relief for Malaysians.
At least that was what Malaysians thought...until the bombshell was dropped today ( barely 24 hours later). The same Minister is now claiming that petrol price is going to be reviewed monthly.
It started off with a quarterly review (so say the Prime Minister), then it was no hike till March 2009 (yesterday) and now monthly review. What's next? When will this "marry-go-round" or "hide n seek" between the Government and public end?
Perhaps, the Minister got a tick off from the Prime Minister's Office reminding him that his statement has strayed from the RM 0.30 per litre subsidy policy. Can't help but wonder whether they may also be avid readers of malaysianetwork as this was the subject of our article yesterday.
For a person holding such high profile public office and an elected representative, the sudden u-turn is nothing but shocking and outrageous! Let's be reminded that it is this same Minister that gave Malaysians the anticipation that fuel price will be increased in August but the increase happened the same midnight as the announcement itself.
How, can anyone teach us how can we have the slightest trust in his statements in the future? Its simply a case of crying wolf too many times. Even kids get turned off if you deceive him too often. These reactions are natural and Malaysians should not be blamed for feeling uncertain, insecure and agitated when our leaders do not uphold even the most basic credibility and conscience.
You are our elected leader for goodness sake!
You are entrusted to be our custodian for goodness sake!
Malaysians ought to be treated with respect like adults!
We are not kids that could be pacified with a pacifier!
Besides Mr Zaid Ibrahim, a fair number of people supported the PM's move to appoint Mr Shahrir Samad as a Cabinet member. Viewed as one of the few remaining moderate and "dissident" voice within the ruling party that has the courage to speak up, Mr Shahrir's appointment gave us a spark of hope to bring forth change in the administration. It was like a beacon of hope.
However, as with the manifesto of the ruling party to bring "peace, safety and prosperity" to Malaysia, all hopes have now evaporated. Malaysians could only hope for the best, come what may.
Nothing is ever going to be certain anymore...not even the assurances given by the very people we entrust to care for our welfare. Not until our leaders learn to be accountable and know the significance of their statements to the people.
"Of course, if the price of the international market exceeds US$ 200 per barrel, then we also give up lah", he said.
Although we should remind ourselves again and again that the higher the price of oil, the better it is for our country's coffers, it was nevertheless a welcoming relief for Malaysians.
At least that was what Malaysians thought...until the bombshell was dropped today ( barely 24 hours later). The same Minister is now claiming that petrol price is going to be reviewed monthly.
It started off with a quarterly review (so say the Prime Minister), then it was no hike till March 2009 (yesterday) and now monthly review. What's next? When will this "marry-go-round" or "hide n seek" between the Government and public end?
Perhaps, the Minister got a tick off from the Prime Minister's Office reminding him that his statement has strayed from the RM 0.30 per litre subsidy policy. Can't help but wonder whether they may also be avid readers of malaysianetwork as this was the subject of our article yesterday.
For a person holding such high profile public office and an elected representative, the sudden u-turn is nothing but shocking and outrageous! Let's be reminded that it is this same Minister that gave Malaysians the anticipation that fuel price will be increased in August but the increase happened the same midnight as the announcement itself.
How, can anyone teach us how can we have the slightest trust in his statements in the future? Its simply a case of crying wolf too many times. Even kids get turned off if you deceive him too often. These reactions are natural and Malaysians should not be blamed for feeling uncertain, insecure and agitated when our leaders do not uphold even the most basic credibility and conscience.
You are our elected leader for goodness sake!
You are entrusted to be our custodian for goodness sake!
Malaysians ought to be treated with respect like adults!
We are not kids that could be pacified with a pacifier!
Besides Mr Zaid Ibrahim, a fair number of people supported the PM's move to appoint Mr Shahrir Samad as a Cabinet member. Viewed as one of the few remaining moderate and "dissident" voice within the ruling party that has the courage to speak up, Mr Shahrir's appointment gave us a spark of hope to bring forth change in the administration. It was like a beacon of hope.
However, as with the manifesto of the ruling party to bring "peace, safety and prosperity" to Malaysia, all hopes have now evaporated. Malaysians could only hope for the best, come what may.
Nothing is ever going to be certain anymore...not even the assurances given by the very people we entrust to care for our welfare. Not until our leaders learn to be accountable and know the significance of their statements to the people.
Monday, June 9, 2008
READ MY LIPS: NO MORE PRICE HIKE TILL MARCH 2009
A few days before the petrol price hike, our Domestic Trade & Consumer Affairs Minister told the Malaysian public that the increase will take place in August. Then suddenly on March 4th, the Prime Minister announced that the new price for fuel will take into effective immediately after midnight.
During the same press conference, the Prime Minister took great lengths to explain that now the subsidies will be constant - at RM 0.30 per liter. Price for fuel will be revised on a quarterly basis but one thing will remain constant - the RM 0.30 per liter subsidy.
Based on the formula, if the international market price of fuel were to increase by RM 1 per litre, our pump price will also increase at the same rate - to RM 3.70 because the Government will only subsidise RM 0.30 per litre. If not for the Government's intervention, the price then would have been RM 4.00 per litre.
Notwithstanding the fact that our country is better off when the international crude oil price goes up, the Minister's statement yesterday is not in conformance to the formula announced by the Prime Minister.
Price of crude oil fluctuates everyday. If the subsidy remains on a constant value of RM 0.30 per litre, Malaysians should start getting used to fluctuations to the pump prices every 3 months.
Although Malaysians there is a sense of "relief" with the Minister's statement, one no longer knows whether it will or will not truly materialise. The Government announced that the price will increase in August but it did not happen that way.
Though it is to our favour (if there won't be any hike till March 09'), the Government seemed so determined to keep the subsidy constant at RM 0.30 per litre. But now it seems they are willing to fork out more if necessary.
All being said, one fact remains...if price of fuel go up to US$200/barrel, our country should be flushed with money earned from oil exports. There is no reason for the Minister to set the "point of reference" of US$200/barrel as the point of trigger for another increase claiming that it could no longer afford to provide subsidies.
If price of oil reaches US$200/barrel, not only will Malaysia have more than sufficient funds for development, enhancing public transport, subsidies but we will also have abundance in inheritance for our future generations.
All this is only possible if only we manage what we have today with great care and accountability.
During the same press conference, the Prime Minister took great lengths to explain that now the subsidies will be constant - at RM 0.30 per liter. Price for fuel will be revised on a quarterly basis but one thing will remain constant - the RM 0.30 per liter subsidy.
Based on the formula, if the international market price of fuel were to increase by RM 1 per litre, our pump price will also increase at the same rate - to RM 3.70 because the Government will only subsidise RM 0.30 per litre. If not for the Government's intervention, the price then would have been RM 4.00 per litre.
Notwithstanding the fact that our country is better off when the international crude oil price goes up, the Minister's statement yesterday is not in conformance to the formula announced by the Prime Minister.
Price of crude oil fluctuates everyday. If the subsidy remains on a constant value of RM 0.30 per litre, Malaysians should start getting used to fluctuations to the pump prices every 3 months.
Although Malaysians there is a sense of "relief" with the Minister's statement, one no longer knows whether it will or will not truly materialise. The Government announced that the price will increase in August but it did not happen that way.
Though it is to our favour (if there won't be any hike till March 09'), the Government seemed so determined to keep the subsidy constant at RM 0.30 per litre. But now it seems they are willing to fork out more if necessary.
All being said, one fact remains...if price of fuel go up to US$200/barrel, our country should be flushed with money earned from oil exports. There is no reason for the Minister to set the "point of reference" of US$200/barrel as the point of trigger for another increase claiming that it could no longer afford to provide subsidies.
If price of oil reaches US$200/barrel, not only will Malaysia have more than sufficient funds for development, enhancing public transport, subsidies but we will also have abundance in inheritance for our future generations.
All this is only possible if only we manage what we have today with great care and accountability.
Sunday, June 8, 2008
Please Respect Our Intelligence...PLEASE!
The recent price hike in petrol prices have led to many articles in the mass media providing suggestions on ways to help enhance your mileage per litre of fuel. Savings may be achieved by changing our driving behaviour, mantaining peak performance of our vehicles and ultimately, a change in our lifestyle.
Together with the announcement of the price hike, it is also decided that a rebate of RM625 will be paid to registered owners of vehicles below 2,000c.c. According to our Second Finance Minister, the amount is sufficient to offset the RM0.78/litre increase in pump prices so long we travel within 50km per day. This translates to RM62 worth of rebate per month.
Let's do a quick check on the figures. A normal car typically consumes 1 litre of fuel to travel 10km. This is achievable provided if you drive "economically" as suggested by the cost-saving articles - no revving, constant speed, light footed, etc.
Travelling 50km per day will consume at least 5 litres of petrol. This translates to paying an additional RM 3.90 per day (RM0.78 x 5 litres). If my calculator is right, this means that the same driver has to pay an additional RM 117 per month! It really does not require a genius to work out this simple sum. Even a primary school student can solve this mathematical equation.
Coincidently, in today's newspaper, a proud owner of a hybrid car claim at he could travel twice the distance with the same amount of fuel. If this is true, then our Second Finance Minister may have been assuming that most cars in Malaysia are hybrids. Hybrids aside, it is not possible to find a 100% petrol-powered car that could travel 20km for every litre of fuel. If it is possible, then hybrid technology itself would not have even been created.
Based on the above, we can assuredly conclude that the RM625 rebate will never be sufficient to offset the impact of the price increase. This despite using the most conservative of circumstances. Many are expected to travel more than 50 km per day. This does not yet include fuel being consumed when the car is idle in peak-hour jams.
The only way for the RM625 rebate to be better off than before would be those from the high and super high income group. These are people who own five, six or perhaps 10 or more cars. The cars, though idle, will generate income for its already wealthy owner.
This being the case, the noble purpose of this rebate itself, which is to soften the blow of the price hike on the low and middle income group, will not see the justice it was meant to achieve. On the contracy it seems the rich will benefit even more under this scheme.
Perhaps, our Second Finance Minister would have gained more "mileage" if he were to acknowledge that the RM625 rebate is actually insufficient to offset the price hike but it is a sincere token from the Government to help soften the burden of the people.
This would have eliminated any hint of insult the statements would have inflicted on the people's intelligence because common sense will always prevail.
Together with the announcement of the price hike, it is also decided that a rebate of RM625 will be paid to registered owners of vehicles below 2,000c.c. According to our Second Finance Minister, the amount is sufficient to offset the RM0.78/litre increase in pump prices so long we travel within 50km per day. This translates to RM62 worth of rebate per month.
Let's do a quick check on the figures. A normal car typically consumes 1 litre of fuel to travel 10km. This is achievable provided if you drive "economically" as suggested by the cost-saving articles - no revving, constant speed, light footed, etc.
Travelling 50km per day will consume at least 5 litres of petrol. This translates to paying an additional RM 3.90 per day (RM0.78 x 5 litres). If my calculator is right, this means that the same driver has to pay an additional RM 117 per month! It really does not require a genius to work out this simple sum. Even a primary school student can solve this mathematical equation.
Coincidently, in today's newspaper, a proud owner of a hybrid car claim at he could travel twice the distance with the same amount of fuel. If this is true, then our Second Finance Minister may have been assuming that most cars in Malaysia are hybrids. Hybrids aside, it is not possible to find a 100% petrol-powered car that could travel 20km for every litre of fuel. If it is possible, then hybrid technology itself would not have even been created.
Based on the above, we can assuredly conclude that the RM625 rebate will never be sufficient to offset the impact of the price increase. This despite using the most conservative of circumstances. Many are expected to travel more than 50 km per day. This does not yet include fuel being consumed when the car is idle in peak-hour jams.
The only way for the RM625 rebate to be better off than before would be those from the high and super high income group. These are people who own five, six or perhaps 10 or more cars. The cars, though idle, will generate income for its already wealthy owner.
This being the case, the noble purpose of this rebate itself, which is to soften the blow of the price hike on the low and middle income group, will not see the justice it was meant to achieve. On the contracy it seems the rich will benefit even more under this scheme.
Perhaps, our Second Finance Minister would have gained more "mileage" if he were to acknowledge that the RM625 rebate is actually insufficient to offset the price hike but it is a sincere token from the Government to help soften the burden of the people.
This would have eliminated any hint of insult the statements would have inflicted on the people's intelligence because common sense will always prevail.
Fuel Price - Are We Getting A Fair Deal?
As you read this article, you would have probably already paid the new price for petrol for your vehicles for the first time after the latest increase by the Government. My guess is, you paid RM110-RM130 for a full tank of fuel when it used to cost RM70-90, depending on what car you drive.
It is understandable that the people are upset with the latest hike. This comes during very challenging times as many are trying to grapple with the spiralling prices of essential items. Irregardless of whether you own a vehicle or not, the increase of petrol and diesel prices, let alone at such a quantum, will have an impact on your life some way or another. Life is such these days that the world is in its prime of addiction to oil. This phenomenon trancends beyond boundaries and knows no racial and religious discrimination. In other words - everyone is affected. Mankind and humanity itself is threatened.
It is hard to imagine how our friends in the lower income group will cope with the current situation when even the middle income group are beginning to feel the heat. For these group of our fellow Malaysians, changing of lifestyle is not an option as their only goal is to make sure there is enough to feed the family and to have a secure place to stay. Maslow described these as essential needs (a.k.a. keperluan asas) of every human and even basic needs now come at a premium.
Yes, there is no doubt this is a global phenomenon. From factors such as climatic changes to market speculation, prices of commodities have risen to unprecedented levels. In challenging times such as these, it is difficult to phathom the reasons why a country blessed with natural resouces would struggle to cope with the prevailing world order.
Malaysia - the Top 20 trading nation in the world is a nett exporter of petroleum (a.k.a black gold) and other much sought after commodities today such as palm oil, tin, natural gas, timber and more. The current high prices for commodities should favour countries like Malaysia as increased prices translates to increased revenue injected into the local economy.
It would not be unrealistic to say that Malaysia is one of the fortunate countries to gain from the inflated prices of world petrol prices. If you sell something more than you buy them, you will stand to gain if the price is higher. Its simple economics. There are no 2 ways about it. Petronas' profit of RM80 Billion is a testament to this belief.
Of course, it is common knowledge that petroleum is an ever depleting, non-renewable natural resource. The more you pump, the quicker it will finish. It is true that there will come a day when the country will be a nett importer of fuel. That will happen soon according to the Government, in 2014.
That is the future but as of now, the fact remains that the higher the international price of fuel goes, the more it benefits our country. In other words, despite the increase in subsidy for fuel at the pumps, the higher revenue derived from us exporting the "black gold" is overwhelmingly in our favour. Using a hyphothetical figues, the subsidy may be RM 7 Billion in 2006 but the surplus (profits from export minus subsidy) may only be RM5 Billion when prices are relative lower. In 2008, the subsidy may be RM28 Billion (figures may vary depending which minister you listen to) but the surplus will far exceed the RM5 Billion in 2006. To translate it to English, it would simply mean that it was actually a heavier burden for the Government to subsidise us back then compared to now.
Justifiably, some of us may say that we should think of the future generations and not being selfish and use up all the natural resources in our time. If this was the noble idea all these while, we should've extracted less fuel from our shores when the price of petroleum was at its lows in the mid-90s so that there will be more for us to pump out when the prices are high - like now.
If we were foresighted enough, we would also have had a stockpile plan back then to better manage the movements of this commodity. We would've imported more than we sell when prices were low and do the exact opposite when the prices are high. This way, we would have achieved maximum returns from the ever limited and depleting petroleum resources that we are blessed with.
We can't help but ponder if such mechanisms were in place, perhaps our oil would've lasted us till 2050 and beyond. Having oil is a trump card. If only we manage our resources correctly, it will benefit the nation irregardless whether oil is cheap or expensive in the world market.
While it is good to think of leaving whatever that is left for the future generations, it is worthwhile to note that what happens in the future is inevitably shaped by what is happening today. For the future to be brighter, we should and must weather these challenging moments together - people and Government.
There is no doubt the Government can afford maintaining low domestic petrol prices and avoid Malaysia falling into spralling inflation, economic depression and abscurity. There will still be more than sufficient left for nation building, development programmes, community programmes and savings.
Comparing our pump prices to those of non-exporting coutries like Thailand and Singapore will not help. Comparing our pump prices with developed countries with high per capita income is not a fair assessment. Comparing us with Indonesia, a nett importer of oil with 10x our population, makes our situation look pitiful.
A fair gauge would be to compare Malaysia with similarly fortunate nations like Venezuela, Nigeria and even our neighbour Brunei. If these developing and 3rd world countries blessed with oil can do it, Malaysia should not be the odd exception.
If artificially lower pump prices for diesel and petrol distorts the true state of our economy (as claimed by economists and analysts), then the government should also allow for market prices for imported cars and truly opening up the economy. Everything will be done according to market forces under the spirit of free trade with total dismantling of trade and non-trade barriers, discriminatory practices and monopolies in certain industries.
With the excise duties that Malaysians pay for the vehicles they buy, the Government should have sufficient revenue (not to mention profits from oil exports) to provide subsidies. Essentially, the vehicle owners have paid for the "subsidies" in advance - an amount that should be sufficient to cover the mileage used during the entire lifespan of an average car.
This source of revenue coupled with earnings from oil exports other taxes make it difficult for Malaysians to understand the need to increase the pump prices. Needless to say, the price of essential consumer products will increase due to higher logistics cost. Goods must travel the entire supply chain before reaching the end user. Goods don't simply walk into the supermarkets, they are sent there by vehicles consuming diesel. Normally, after prices go up, they never come down.
This does not yet include the impact of electricity costs come July, which will affect the cost of production of goods. It is going to be very painful for many when the full impact is felt.
Those who have ears, let them hear!!!
Those how have eyes, let them see !!!
It is understandable that the people are upset with the latest hike. This comes during very challenging times as many are trying to grapple with the spiralling prices of essential items. Irregardless of whether you own a vehicle or not, the increase of petrol and diesel prices, let alone at such a quantum, will have an impact on your life some way or another. Life is such these days that the world is in its prime of addiction to oil. This phenomenon trancends beyond boundaries and knows no racial and religious discrimination. In other words - everyone is affected. Mankind and humanity itself is threatened.
It is hard to imagine how our friends in the lower income group will cope with the current situation when even the middle income group are beginning to feel the heat. For these group of our fellow Malaysians, changing of lifestyle is not an option as their only goal is to make sure there is enough to feed the family and to have a secure place to stay. Maslow described these as essential needs (a.k.a. keperluan asas) of every human and even basic needs now come at a premium.
Yes, there is no doubt this is a global phenomenon. From factors such as climatic changes to market speculation, prices of commodities have risen to unprecedented levels. In challenging times such as these, it is difficult to phathom the reasons why a country blessed with natural resouces would struggle to cope with the prevailing world order.
Malaysia - the Top 20 trading nation in the world is a nett exporter of petroleum (a.k.a black gold) and other much sought after commodities today such as palm oil, tin, natural gas, timber and more. The current high prices for commodities should favour countries like Malaysia as increased prices translates to increased revenue injected into the local economy.
It would not be unrealistic to say that Malaysia is one of the fortunate countries to gain from the inflated prices of world petrol prices. If you sell something more than you buy them, you will stand to gain if the price is higher. Its simple economics. There are no 2 ways about it. Petronas' profit of RM80 Billion is a testament to this belief.
Of course, it is common knowledge that petroleum is an ever depleting, non-renewable natural resource. The more you pump, the quicker it will finish. It is true that there will come a day when the country will be a nett importer of fuel. That will happen soon according to the Government, in 2014.
That is the future but as of now, the fact remains that the higher the international price of fuel goes, the more it benefits our country. In other words, despite the increase in subsidy for fuel at the pumps, the higher revenue derived from us exporting the "black gold" is overwhelmingly in our favour. Using a hyphothetical figues, the subsidy may be RM 7 Billion in 2006 but the surplus (profits from export minus subsidy) may only be RM5 Billion when prices are relative lower. In 2008, the subsidy may be RM28 Billion (figures may vary depending which minister you listen to) but the surplus will far exceed the RM5 Billion in 2006. To translate it to English, it would simply mean that it was actually a heavier burden for the Government to subsidise us back then compared to now.
Justifiably, some of us may say that we should think of the future generations and not being selfish and use up all the natural resources in our time. If this was the noble idea all these while, we should've extracted less fuel from our shores when the price of petroleum was at its lows in the mid-90s so that there will be more for us to pump out when the prices are high - like now.
If we were foresighted enough, we would also have had a stockpile plan back then to better manage the movements of this commodity. We would've imported more than we sell when prices were low and do the exact opposite when the prices are high. This way, we would have achieved maximum returns from the ever limited and depleting petroleum resources that we are blessed with.
We can't help but ponder if such mechanisms were in place, perhaps our oil would've lasted us till 2050 and beyond. Having oil is a trump card. If only we manage our resources correctly, it will benefit the nation irregardless whether oil is cheap or expensive in the world market.
While it is good to think of leaving whatever that is left for the future generations, it is worthwhile to note that what happens in the future is inevitably shaped by what is happening today. For the future to be brighter, we should and must weather these challenging moments together - people and Government.
There is no doubt the Government can afford maintaining low domestic petrol prices and avoid Malaysia falling into spralling inflation, economic depression and abscurity. There will still be more than sufficient left for nation building, development programmes, community programmes and savings.
Comparing our pump prices to those of non-exporting coutries like Thailand and Singapore will not help. Comparing our pump prices with developed countries with high per capita income is not a fair assessment. Comparing us with Indonesia, a nett importer of oil with 10x our population, makes our situation look pitiful.
A fair gauge would be to compare Malaysia with similarly fortunate nations like Venezuela, Nigeria and even our neighbour Brunei. If these developing and 3rd world countries blessed with oil can do it, Malaysia should not be the odd exception.
If artificially lower pump prices for diesel and petrol distorts the true state of our economy (as claimed by economists and analysts), then the government should also allow for market prices for imported cars and truly opening up the economy. Everything will be done according to market forces under the spirit of free trade with total dismantling of trade and non-trade barriers, discriminatory practices and monopolies in certain industries.
With the excise duties that Malaysians pay for the vehicles they buy, the Government should have sufficient revenue (not to mention profits from oil exports) to provide subsidies. Essentially, the vehicle owners have paid for the "subsidies" in advance - an amount that should be sufficient to cover the mileage used during the entire lifespan of an average car.
This source of revenue coupled with earnings from oil exports other taxes make it difficult for Malaysians to understand the need to increase the pump prices. Needless to say, the price of essential consumer products will increase due to higher logistics cost. Goods must travel the entire supply chain before reaching the end user. Goods don't simply walk into the supermarkets, they are sent there by vehicles consuming diesel. Normally, after prices go up, they never come down.
This does not yet include the impact of electricity costs come July, which will affect the cost of production of goods. It is going to be very painful for many when the full impact is felt.
Those who have ears, let them hear!!!
Those how have eyes, let them see !!!
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