Wednesday, June 4, 2008

Oiley Hikey

The Malaysian Government will hike petrol prices tonight (4th June 2008) by 40% to RM 3.70 (premium leaded). Here's a quick 5-min what-I-think.

Pros:

  • Less pressure from the oil price increase
  • Better subsidy segmentation
    • People who need the subsidy (lower income bracket) will receive it - i.e. the subsidies are now easily tailored
    • Previously through a blanket subsidy, the people who benefited most from the subsidies are the ones that use the most petrol, who aren't necessarily the ones who need it the most (in fact quite the opposite)
  • Less problems with (sorry) Singaporeans and Thais skivving off Malaysian subsidies
  • More thought will be given to public transport
    • Government can use the extra funds to improve public transport (both in logistics and in public image)
    • People will be pushed to consider public transport instead of wanting a car as a 'given'
    • Less of the 'I must have a car or die trying' mentality
    • Hybrids may be able to break into the Malaysian market (a bit of wishful thinking but there you go)
  • - Makes the government extremely unpopular, which is always entertaining to watch
Cons:
  • My parents probably have to pay more
  • Extra funds may not be used for the right purposes (in which case I'd rather have the old-style subsidy obviously)
  • There will be a traffic jam tonight at all petrol stations
  • Poor station jockeys will have to work OT tonight
Considering that crude oil prices have doubled since last year and may very well triple, it's not really a drastic measure by the government...

2 comments:

estanCus said...

heyya junkie, i just read ur oiley hiky post after leaving a few words at your chatbox.

I like what you wrote. amusing.

but i must say, i have begun to lose faith witht he current government and its governance towards the nation.

i totally agree with you that subsidy cannot be contiuned because consumption will be never ending. and that means the government will only need to fork out more and more $$ when global oil prices hike, inevitably.

Okay, say they remove subsidy, which they already have, they should also 'show' that they are putting the money to better use. im not sure if you're a malaysian, but i just wana share with you, i feel that most malaysians are a bunch of SS -- syok sendiri people.

i hear things about numerous white elephant projects in the country -- all because the powers that be 'wants to have the the other guy is having'.

Scary, when you think of it. Malaysia collects all kinds of taxes and in theory, should have reserves, but where is it? @_@

oh well, probably u might wanan blog about it? lolx

just rambling here. cheerios~!

junkie said...

hey estancus

Well, my point was that economically, the subsidy cuts make economical sense - although the sudden cuts will harm the government's image, they really have no one to blame but themselves. Salaries have not been keeping up with basic commodity costs due to massive institutionalised money-siphoning, so it's only a matter of time before protests are sparked due to dissatisfaction.

Like my point in my entry, obviously none of this applies if the government just pockets everything, in which case we have everything to lose.