Honestly I am not supportive of subsidy scheme, because I think it reduces competitiveness, creating false impression and sense of security to the receivers. In extreme term, subsidy can be equated as opium. It is addictive, and it is hard to shed especially if you are having it for more than 20 years. (Oil subsidy was introduced in 1982 if I remember correctly.)
Just look at the reactions by Malaysians after the ‘removal of oil subsidy’ (That’s the correct term. oil price hike is not ). There is a group with the name ‘1 Million Malaysian who are sick of the RM2.70/liter Petrol Price‘ in Facebook and guess what, as of today – less than 1 week – a staggering number of 35,582 people already joined the group. That is roughly 5k new members a day, 200 members an hour, 3 member a minute!! I read somewhere that, less than 24 hours it was created, the group had some 1,767 members! It reminds me of the withdrawal symptoms associated with drugs, alcohol and nicotine. This is a case of when one is hardest hit, one will arise to make noise, if the problem affects others, that individual may just care… less
Oh, I heard many times “Politics is not important”, “It has nothing to do with me”, “I have no interest in politics”, “I couldn’t care less about politics, as long as I can cari makan enough”, well you get the idea. Yes, it is not important, I guess many still can ‘cari makan’ heh? The ruling government was elected through political process, and the very government that you voted in or could not care less to vote that made the very policy of reducing the oil subsidy last week. Job well done, ignorant retards!! This message is especially for those that:
1. Never aware of what shits are going on around them. Blur sotongs!! Fry them!!
2. Aware but too ‘busy’ to do anything.
Job well done, ignorant-irresponsible-lazy retards!!
I have nothing against those who voted for the current ruling government for they made their choice and they shall live by it. After all they already exercised their responsibility as a citizen and chose their side.
Well, we come to the issue – oil subsidy. Do you think the government is telling the truth? That they can no longer subsidise the petrol? Is there anything we do not aware of? What is the government hiding, if there is anything to hide??
From Chedet, ‘Adviser’ of Petronas:
I believe the people expect the increase of petrol price. But what they are angry about is the quantum and the suddenness. The Prime Minister was hinting at August but suddenly it came two months earlier, just after the ban on sale of petrol to foreigners.
If the increase had been more gradual, the people would not feel it so much. But of course this means that the Government would have to subsidise, though to a decreasing extent.
Can the Government subsidise? I am the “adviser” to Petronas but I know very little about it beyond what is published in its accounts. What I do know may not be very accurate but should be sufficient for me to draw certain conclusions.
Roughly Malaysia produces 650,000 barrels of crude per day. We consume 400,000 barrels leaving 250,000 barrels to be exported.
Three years ago the selling price of crude was about USD30 per barrel. Today it is USD130 – an increase of USD100. There is hardly any increase in the production cost so that the extra USD100 can be considered as pure profit.
Our 250,000 barrels of export should earn us 250,000 x 100 x 365 x 3 = RM27,375,000,000 (twenty seven billion Ringgit).
But Petronas made a profit of well over RM70 billion, all of which belong to the Government.
By all accounts the Government is flushed with money.
But besides petrol the prices of palm oil, rubber and tin have also increased by about 400 per cent. Plantation companies and banks now earn as much as RM3 billion in profits each. Taxes paid by them must have also increased greatly.
I feel sure that maintaining the subsidy and gradually decreasing it would not hurt the Government finances.
Here are some conspiracy theories. Could the following events partially related bsides the current hiking of world oil price? Caution: Read for fun!
1. Petronas in RM8b deal – Under an agreement, Australia’s Santos and Petronas will form a joint venture to develop and operate a 450-km gas pipeline and an LNG plant at Gladstone, Queensland. The need of cash flow to pump into the buying of Santos so need to reduce the subsidy? Or the government is unable to negotiate new contract with Petronas on subsidy?
2.) FUEL PRICE HIKE: Oil exploration costs Petronas a bomb, says CEO – Petronas needs extra money for their exploration of deep water in Kikeh??
3.) Petronas starts methanol plant commissioning work – Petronas needs money to pay the contractors to erect this Labuan 2nd phase Labuan Methanol plant??
4.) Somebody dapat ilham (received divine intervention?) to ‘reduce oil subsidy’. Hahaha!
By all mean, wipe out the subsidy because it is good for the long term. Just it is too sudden for us the rakyat to absorb the after effects. Yes, reduce the subsidy but, be TRANSPARENT why you do it. That is what we as Malaysians want to know. So far, we were given half-baked answers, some downright stupid explanations! You justify the reduction of subsidy, if it makes sense why not? Quoting Chedet again:
Obviously our increase in petrol price is far less than in the United Kingdom or the United States. But our per capita income is about one-third of theirs. In purchasing power terms our increase is more than in the UK or the US.
The increase hurts but the pain is greater not just because of the increase percentage-wise is higher than in developed countries but because of the manner the increase is made.
In the first place the Government should not have floated the Ringgit. A floating rate creates uncertainties and we cannot gain anything from the strengthened Ringgit. Certainly the people have not experienced any increase in their purchasing power because of the appreciation in the exchange rate between the US Dollar and the Ringgit.
Actually the Ringgit has increased by about 80 sen (from RM3.80 to RM3.08 to 1 US Dollar) per US Dollar, i.e. by more than 20 per cent. Had the Government retained the fixed rate system and increased the value of the Ringgit, say 10 per cent at a time, the cost of imports, in Ringgit terms can be monitored and reduced by 10 per cent. At 20 per cent appreciation the cost of imports should decrease by 20 per cent. But we know the prices of imported goods or services have not decreased at all. This means we are paying 20 per cent higher for our imports including the raw material and components for our industries.
Since oil prices are fixed in US Dollar, the increase in US Dollar prices of oil should also be mitigated by 20 per cent in Malaysian Ringgit.
Conclusion: I am not against the reduction of oil subsidy, but the manner it is made. I want good explanations. Make me understand. Do not shove funny numbers into my small brain. I have my numbers, like this:
Country GDP – per capita ($)
Hong Kong – 36,500
Malaysia – 12,700
Iran – 8,900
Venezuela – 6,900
Premium Unleaded petrol price in
Hong Kong is : 10.22 HKD per litre = RM 4.27 per litre
MALAYSIA is : RM 2.70 per litre
GDP ratio between Malaysia and Hong Kong is 12, 700 : 36,500 = 1 : 2.87
Re-adjust the petrol price based on income: RM4.27/2.87 = RM 1.47
==> Obviously, our RM 2.70 per litre is far more expensive than Hong Kong’s RM 1.47 after comparing both countries’ GDP. Wait.. Hong Kong is a net oil importer. Hmm.. their cars are cheaper too. Oh, in Hongkong having a car is a luxury, not a necessity like here in Malaysia