Thursday, June 05, 2008

Petrol Price Hike

Quoting this from Chia Yee who sent her thought out in a mailing list.

I personally fully agree that while it feels bad, each time we see the price at petrol station sky rockets, or worse still, almost all restaurants have increased their price, but I think we need to understand and appreciate the situation. We have spent way too much subsidize our petrol. It shouldn't be subsidized a lot more.

And for this, there would be a rebate of RM620 per year for those with cars below 1999 cc. It effectively means there will be no road tax for those cars below 1999 cc.

Below are Chia Yee's thoughts.

Why die when our petrol although raised by 40% but still is among the lowest in the world? Even Russia, the 2nd largest oil producer in the world has higher prices at the pump than us.

Food prices has increased as much as 60% since 2007 and that is a "rise" that will/has caused actual death. Whereas, higher petrol prices might only mean a change to our lifestyle and driving habits, e.g. car pool.

Food inflation is more deadly, but we seem to accept it better whereas every time petrol subsidy is reduced (though still making ours among the lowest in the world), we are very indignant hehe. We might be an oil producing country but how much more oil Msia still has? -_- If prices remain as cheap as it is, we'll be consuming oil faster and leave our kids to suffer, why not slow ourselves down and share the burden with our next generation?

Looking at the table below, it might not be a coincident that those countries with good public transports also pay the highest for petrol.

UK & the Netherlands are oil producers but they tax petrol instead of subsidizing it.

Cheap oil is an addiction human beings should kick.

We shouldn't protest against lowering subsidies. Instead we should focus all our energy to ensure our government overhaul our public transport.

We want to be like Japan where fuel price is US$1.94/L (RM6.20/L) but with awesome public transport instead of be like Nigeria whr petrol is US$0.10/L (RM0.32/L) or Iran US$0.11/L (US$0.35/L).

Plus, now that the subsidy cushion is gone albeit not entirely, consumers will start to feel the pinch, thus driving down demand. Hundred dollar barrel oil would have to go back down in tandem with lower demand.

I'm only expressing my observations and my rationale might be faulty, but what would you guys have done if the mandate is on your hands instead? Malaysians are not really feeling the pain of higher food prices felt around the region because our government is controlling the prices (read: subsidies again). I think it is better for the poor that government cut fuel subsidies and channel it into food subsidies, no?

One more note, a great many civilizations have collapsed from abuse of environmental resources, e.g. Mayan from unfettered deforestation. If we don't reign in our hydrocarbon (which includes coal) addiction, global warming or some other phenomena might hand us a fate similar to the dinosaurs. No?

High oil price is a complicated phenomena and no one really seems to understand why it's at it's current price, not even the experts. But one thing though, we should also vent our anger at hedge funds & speculators making killings over high oil prices, they even more than oil companies look forward to US$200/bbl oil.

Netherlands 2.57 8.22
UK 2.26 7.23
Hong Kong 2.00 6.39
Singapore 1.60 5.12
Australia 1.48 4.74
Philippines 1.22 3.90
Thailand 1.18 3.78
Russia 1.00 3.20
Malaysia 0.84 2.70
Indonesia 0.65 2.08

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Anonymous said...

Young man. Your arguments seem to be that

1) Malaysia is not the worst - i.e. there are worse places in the world

2) There are bigger problems - i.e. Food costs are just as bad or worse

3) There are solutions and "only if..." we had those solutions then things would not be that bad

4) I know what's better for you anyway - i.e. we should kick the addiction to cheap oil

While we are told that things are bad and we must tighten our belt this is what the government is spending our taxes on.

Well, here's what the government is spending your money on

- 92 Million to send a man to space
- 400 million to pay for a philharmonic orchestra
- 3.45 Billion for a rail track from Seremban - Gemas (cf the PD "road to nowhere")
- 100 Million on leaky roof of Parliament (24 million for "consulting") which still leaks
- Millions on a national service program which has done nothing except kill our children
- 4.6 Billion to Port Klang dissapeared
- 2.4 Million for election ink which turned out to be invisible ink

Apparently the government wants everyone to spend less and change lifestyle yet still spend like drunken sailors. I will say that at least the drunken sailor spend his own money. The government is spending our money.

Chen Chow said...

Thanks for your post, but I would beg to differ.

For instance, the Astronaut, South Korea government is doing exactly like what Malaysian government did, and I would say that the money did bring a lot of awareness on space among the youth. A lot of kids today, have a dream to learn more about sciences etc. Those are the soft sides of stuff learned.

The same goes with National Service. A lot of the students have picked up a lot of life skills. I have spoken to many of them, and many of them did make a lot of friends, especially across races. A lot of them pick up exposure to do charitable stuff as well.

Philharmonic Orchestra is being done in almost all major cities around the world, and it does bring quite a substantial revenue as well. The few hundred million is the expenditure, but how about the revenue? I have paid to watch the concert quite a few times already.

On the port klang, it is a soft loan, and not a missing of money. Essentially, the Free Zone took a loan of RM4.6 Billion, with quite a high interest. So, the government does earn back through the interests.

While I won't want to say that everything is perfect, especially on things like leaking in parliament, I would still like to say that in terms of inflation, we are doing a much better job compared to most Asian countries.