HOW WILL POORER PEOPLE COPE?
Such a steep rise in price will test even those of us in the so-called middle-income bracket. For sure, calculators would have been taken out from their resting places all last night to see what financial adjustments would have to be made just to make ends meet. Some things could still be had albeit in smaller portions or on reduced frequency. Some things would have to go altogether. The bigger plans might have to be put on hold or undergo further review. With some changes in lifestyle, we will manage at least until August when we have been told to expect another huge price rise.
In a sense, the situation may even be good for us in some ways. Under the new circumstances, we will not just get into the car and drive off. The reason for driving may have to be more intentionally thought through. The car stays in the driveway more often, our limbs may see more action and put to more frequent use than before. Exercise for healthier bodies!
As the price of many other products and services will rise with the transportation cost, a thorough re-evaluation of what we normally consider as essential may have to be made. Generally, such an evaluation exercise may result in bringing our activities and consumption habits to more manageable levels.
This is of course as far as individual families go. The ramifications of the steep fuel price rise on businesses do not necessarily follow such a steady take-it-as-it-comes approach. The stakes are much higher. Business deals sealed months or even longer back have been based on old prices. Calm is unlikely to prevail. More likely we will see to some significant degree some disconnect, manipulations, loss of confidence, slowdown, wait and see, flight of investment. Especially if another big price increase is to come in August. We are in for some very unstable times as a series of significant adjustments will take place.
If the middle-classes are finding all this hard to swallow, how will poorer people cope? At least the middle-income group have options to facilitate some necessary adjustments. But if you have already adjusted and tuned your budget so fine that there are no savings and no more room for manoeuvre, with your back against the wall financially, the options if any you have to consider will be drastic.
Some thing has to give we say.For the really poor, with no space or means for self-production of food, especially in the case of the urban poor, the struggle will be very grim indeed. There is no savings account to draw from, no holiday plans to scrap, no personal transport to give up, nowhere to cut cost. They will cut corners on health, hygiene and safety. They will only be able to cut on essentials such as food and medicine. Come August, the poor will be hit really hard. Talk of rebates will be no real solution for the poorer people. They will be hardest hit by inflation.
Come August, should the powers that be make good on their plan to remove subsidies for fuel altogether, the middle-classes may also consider cutting down on their giving to charity.
The pill is made much harder to swallow because of questionable issues surrounding price hikes. Thinking people will be able to figure out for themselves what is happening. As an oil-exporting country, we too must have profitted and is still profitting from the phenomenal rise in oil prices. The domestic trade ministry in prescribing the sharp increase in the prices of oil products likes to make comparisons with prices in non-oil producing countries around us. What about the following figures from oil-exporting countries:
UAE– RM1.19/litre
Qatar– RM0.68/litre
Kuwait– RM0.67/litre
Saudi Arabia– RM0.38/litre
Iran– RM0.35/litre
Venezuela– RM0.16/litre
No one is suggesting that our oil reserves or production are at the same level as those in Saudi Arabia and other countries but it is not unreasonable to expect that there be some advantage to be gained from our being an oil-exporting country.
The lack of transparency in regard to the earnings of Petronas, the national oil company, and how its profits have been used since its inception in 1974 is not only worrying but highly suspicious. Malaysians can understandably be unhappy about steep oil price hikes in the light of this state of affairs. The natural resources of the country and the disbursements of profits deriving from them must surely be the concern of Malaysians. In the absence of such information, how can Malaysians, many of whom pay taxes of every kind, then be expected to accept oil price hikes by government decree when the said government has not been forthcoming about the affairs of Petronas?
Comments such as the following that have been posted on popular blogs reflect hundreds of others which have expressed similar sentiments:
Cinapek: The whole world knows that even as the Govt complains about the oil price increase and the corresponding increase in subsidies, it is conveniently silent on the equally huge increase in revenue and profits to Petronas who is benefitting from the global surge in oil prices. The GOvt seems to be in a obscene haste to increase the fuel prices but strangely kept silent on any increases on the price of gas supplied by Petronas to the Independent Power Producers at RM6.40/liter while market price is RM35/litre. The Govt has subsidised these fat IPPs to the tune of RM56b while the people are milked to the max.
Santan: Where does my tax money go to? I don’t see enough of it coming back to me, the general public. I see it going towards funding a handful of increasingly fat and lazy bunch, their families and friends. The poor get poorer and the rich, richer. I see ‘white elephants ‘all over Malaysia. I’m tired of paying for others’ inaptitude and selfish greed. Where will the government’s fuel subsidy go to? More ridiculous schemes? More useless space programmes? More overpriced power tools? When will the government realise that enough is enough?
9to5: A fisherman caught a sea bass and cooked it for his son to eat. Before his son could eat the sea bass, the father asked his son to pay up $10. The son thought that the fish was caught abundantly from nature and therefore at little or no cost, asked his father why. The father said “son if I buy that fish in the market, the fish would cost you $15. Therefore, you should be thankful that I’m asking you to pay only $10 because I had subsidised $5 for you! Substitute father with Badawi and son with Malaysians and you will see how the BN government has hoodwinked us all these years!
Tmdtwg: I do have some suggestions. If the BN government wants to put the fuel price at the market price of RM4 per litre, then they must do the following first or simultaneously.
- Make Petronas accounts for the past 30 years (audited) public so that the rakyat knows where the monies have gone. Be accountable.
- Take over all the tolled highways and scrap all toll booths. Make the highway concession agreement public. Punish the ministers and officials involved in signing these lopsided agreements. Ask the toll operators to pay compensation to the rakyat.
- All cabinet members, CMs, MBs, excos, senators, government top brass including those at GLCS must use small cc vehicles and sell off those posh and big cc cars.
- Erase corruption. Compel all office-bearers and government top brass and their families to declare their assets and make it public.
- Fix the public transport system. Najib said this would be done when he increased the petrol price but it has never materialised.
- All lopsided agreements with independent power producers must be reviewed. Those private companies (and GLCs) which have been given a monopoly must contribute 40-60% of their revenue to a special fund to finance research on alternative fuel sources.
Kenny Gan: I don't mind paying market price for petrol provided I can pay market price for cars. Currently, our cars are anything but ‘market price’. We have one of the highest car prices in the world due to our abnormally high import duties on foreign cars. I'm not talking about luxury cars either, half of what we pay for a basic family cars goes to tax. The tax component of a car will pay for the extra cost of unsubsidised petrol for the life of the car! In a country where public transport is abysmal and most people have no practical choice but to own cars, middle-class families are being pushed to the wall. Subsidised petrol helps to offset the high installments car owners have to fork out monthly to pay for their overtaxed cars. Many owners have to take a nine-year loan just to pay off a basic car. On top of that tolls are a heavy burden to motorists and threaten to keep going up due to one sided deals signed with toll concessionaires. The government can do nothing about the world price of crude oil but high car prices and high tolls are definitely self-inflicted. Lack of investment in public transport rubs it in. Is this lack of urgency to improve our public transport designed to help Proton sell more cars? The government has forced the public to own cars by mismanaging the public transport sector, inflicted a high prices for cars, burdened the motorists with extensive toll roads and now wants market price for petrol. Is this a caring government?
These comments articulate distrust, disappointment, cynicism, anger, even disgust. The questions raised are not necessarily rhetorical; they deserve proper answer. However, if you follow the parliamentary sessions, such questions even when raised by the people’s elected representatives are seldom taken seriously and the perfunctory answers given are seldom informative and far from satisfactory. Sometimes they could be even deemed to be insulting to the people’s intelligence.
As some have commented, promises that the savings from previous reduction of subsidies on fuel would be spent on improvement of the public transport systems have not been fulfilled. For many Malaysians, public transportation which is in place today cannot be a real alternative to private transport. For instance, in some LRT stations during rush hours many trains pass without stopping as they are already packed tight with passengers. And for LRT to be an alternative, its routes will have to be substantially extended.
The first step in reducing fuel subsidies effecting a huge price hike is now in force. Like it or not, it has become a reality. A second step is scheduled for August. How will poorer people cope? However will they circumvent this treacherous imposition of rising transportation cost, food prices, inflation affecting all basic essential goods and services? As we who are in a better position than them give vent to our displeasure and tackle the inconvenience of the times, let us not forget those who are in a far worse no-win situation. Their plight and their voices must be heard and literal helping hands must reach them. Their anxieties and suffering must not be overlooked.
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