Tuesday, June 03, 2008

Pump it up

Finally, Datuk Seri Abdullah Ahmad Badawi's government is going to cut all subsidies and let fuel prices raise to market levels. Of course, they are thinking of ways to mitigate such a shock to Malaysian consumers mollycoddled on subsidies for so long.

The Siber Party of Malaysia (M) has long asked for fuel prices to be in tandem with world prices unlike those who have promised to cut prices further if they form the government.

But we feel any move to cut subsidies should also include our recommendation to cut tax on cars or other vehicles. Come on, that would only be fair!

And of course, all savings from the cut subsidies - which is said to amount to some RM56 billion this year at the current global crude oil prices - should be invested in public transport systems owned and operated by the government or at least operated by companies that can make their own profits with leased fleets.

We look forward to tomorrow's announcement with great interest.

After all, it is interesting to note one thing in all the statistics provided by vested groups bitter about fuel price rises, that is, the Malaysian Tapis Spot Price has more than quadrupled from US$31.02/barrel on October 31, 2003 when Abdullah became Prime Minister to US$134.97/barrel on May 23, 2008 when the government started mulling price hikes (adjusted for inflation and notwithstanding the value of the US dollar).

As for fuel prices, it was RM1.35/litre when he took over and is now RM1.92/litre or about a 42 percent increase barring tomorrow's announcement.

But the impact of that rise is greater, as is the increase in Petronas revenues, of which some goes to subsidise gas and other staples. The government will have to review that especially for the independent power producers profiting from such subsidies.

We don't want to point fingers to how this unholy mess of mass subsidies began and our addiction to them but let's pump it up and live with it no matter which government runs Malaysia.

At least you know, vote the Siber Party of Malaysia (M) and pay real prices for everything.

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