So it is either Wednesday or August that the new petrol subsidy will be in place. There is a lot of confusion, in typical Malaysian style. According to Malaysiakini , this is how the confusion arises:
Will it be in August as mentioned previously by the Second Finance Minister Nor Mohamed Yakcop as well as by Domestic Trade and Consumer Affairs Minister Shahrir Abdul Samad today?
Or will it be as soon as this Wednesday as announced also today by Prime Minister Abdullah Ahmad Badawi?
Whenever it may be, one thing is sure – everyone is confused by the conflicting statements from the three ministers.
Earlier today, Shahrir said that fuel prices will go up this August. His remarks echoed Nor Mohamed’s remarks last week of a price hike before the Budget, which will be unveiled on Aug 29.
However, Prime Minister Abdullah said today that the government will announce on Wednesday a new fuel subsidy.
According to Bernama, he also said that the decision on the fuel subsidy will take effect immediately to avoid any speculation
Either way, confusion not withstanding, the petrol pump price is going to go up.
The group that will be hardest hit will be the poor and the middle class living in the city. The rural folks are fairly well off of late thanks to the good commodity prices and a simpler lifestyle than their city counterparts.
The rich has plenty to spare, a few hundred ringgits extra will hardly make a dent on their piggy banks. The poor will probably receive subsidy for their old protons or motorbikes. It is the middle class, earning perhaps around 2000 to 3000 a month that will be hardest hit. The poor has probably been used to living very frugally, but the middle class will see a big chunks of their disposable income going to pay for the increase in fuels. They will have no choice but to change their life style, eating less outside, cut down on entertainments etc.
Nevertheless, ultimately, even the poor, despite receiving subsidy, is going to be badly hit because the price of everything will be up, as a results of the increase in petrol pump price.
The retail sector will be badly ht. Restaurants and supermarkets will be forced to closed because of rising costs and decreasing clientele, and thus unemployment rate may go up and so may the crime rate.
In a nutshell, we will have to face major change and a major overhaul of our lifestyle. Many of us may need to car pool; many of us may need to take public transport. The latter, however, is so inefficient that I doubt it will be ready to face increasing demand if more and more people are forced to take public transport as a results of the oil hike.
We have in fact been given plenty of time to overhaul our public transport system, but sad to say , the whole transport system is still very pathetic, due to lack of good planning and channeling of the necessary funds to white elephant projects
Doing away with subsidy is good in the long run, as I have mentioned before, but it should have been done gradually for the poorer section of the population to adjust. In hindsight, we should have started the process gradually over the last 2 years.
We do not know how the new mechanism is going to be. But, like one of the commentators ‘romerz’ said yesterday in his comment in my yesterday’s post, “No matter how equitable a mechanism or laws we have in place to deal with subsidies, it all counts for nothing when criminal elements can abuse the system and the enforcers are playing a catch-up game. Worse still if the enforcers are in cahoots with the criminals.” This is important and I hope that the setting up of the MCAC has to be hastened.
Now that the subsidy is been re-schemed , I hope that more will be done to improve our public transport system so that the people will have a real alternative .
Please also refer to my post yesterday : Petrol subsidy to be removed in August ?