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February 28, 2006
Downsizing
Yes, we need to cut fuel subsidies, but here is the true price - much more than the extra 30sen per litre - we will have to pay:
Bank Negara Malaysia ... will probably now have to raise its benchmark overnight policy rate by 75 basis points to 4%, and not the 50-basis-point increase expected earlier, economists said." ... CPI growth is expected to perk up to 3.6%-4.0% in March, with a strong increase expected in the subgroup of transport and communication which makes up 21% of the CPI basket," said CIMB Investment Research in a note to clients. [Dow Jones Newswires via Yahoo! News]
Higher interest rates and costlier goods and services.
It's time to tighten our belts.
Posted by aisehman at February 28, 2006 04:40 PM
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Comments
what if oil prices go up to us$100 per barrel next month? if the govt does not increase petrol/diesel prices accordingly (AS PROMISED BY THE PM), it would mean that the govt will have to raise the subsidy for these commodities. which also means the govt will raise prices of other things ..
Posted by: rockybru at February 28, 2006 09:11 PM
Hmm.. so that's why they decided to postpone GST implementation..
Posted by: hew at February 28, 2006 10:22 PM
Ai, nasi lemak going up, mortages going up, water bill, electricity bill, cukai tanah and cukai pintu go up.
Stocks not going up
Posted by: Bigjoe at March 1, 2006 07:41 AM
We are helpless. They are useless.
Posted by: Zainal A. Kasim at March 1, 2006 09:20 AM
Sorry guys...I am going to play the Devil's Advocate here.
The core issue here is to reduce our dependency and addiction on imported oil. Malaysians as usual being selfish individuals, choose not to see the big picture and prefer to whine. It is funny that people who vehemently opposed to all kind of subsidies choose to close one eye when it comes to fuel subsidy.
The right response in this situation is to look for ways to cut our own fuel bills. The increase this time is about 19% and let all look for ways to cut our individual fuel expenditure by at least 20%. That way we will help not just ourselves but also the country. I know this is tough to achieve but not impossible. Malaysians are car-crazy and lazy. Let's us learn to depend less on cars. By adopting some simple practices will bring big savings, speaking from my personal experience.
Personally I agree that sometimes (as in this case) subsidies are useful. The impact price hikes of key products & services can and will have implications far beyond. Usually the worst affected are the poor.
However knowing Malaysians' mentality, no amount of exhortions will persuade them to reduce fuel usage unless through negative incentives like price increase.
Posted by: Sankaran at March 1, 2006 11:41 AM