To hike or NOT to hike?

These days, it's a bit jarang-jarang to see Malaysia mentioned by the international wires. And today, my country is, once gain, appeared on CNN and Al-Jazeera websites. This time it's about the fuel price hike.

Whilst most of us are expecting it to come, but not many people would expect that the government will raise it by 40% plus minus. The government claimed that the new price is still below the actual market price i.e. RM3. In other words, the government still gives 30 sen subsidy. On top of that, the government promised of cash rebate of RM150 and RM625 to motorcyclists (with motorcycles below 250 cc) and motorists (with cars below 2000 cc and pick ups below 2500 cc), once they pay or renew their road tax.

Is this justifiable? Is this fair?

First of all, this is only my personal 2 cent, based on my limited observation and knowledge.

First of all, politic aside, no one can deny that the world price of fuel will never go down, simply because of the demand and supply, and scarce resources theories. There will come a day when there is no oil beneath us, and Malaysia is not excluded. Therefore, we have to embrace the fact that, fuel price is going to go up, sooner or later. Period.

The issue here is how to effectively deal with this phenomena.

To answer this, lets assess the consequences of fuel hike. Immediately, it will cost more to commute and of course, the transportation cost of most businesses will also increase accordingly. And this will effect most, if not all, Malaysians.

On the other hand, where will the savings from fuel subsidy withdrawal goes? One thing for certain is the RM150 and RM625 cash rebates. But will this be equivalent to the total savings? It is not worthwhile, if the people gets only this.

The government needs to do more explanation of what in the pipelines in order to ease the people's financial burdens.

Could we expect further reduction in road tax and of course, tariffs and duties on imported cars and spare parts? This is because maintenance cost also makes a bigger hole on motorists' wallets. And how about NO increment in toll rates, please...

But the above is still NOT enough. The government should at the same time provides cost-effective alternative in the form of an efficient public transportation. The savings should be channelled to Prasarana and KTMB in order to improve the services of LRT, Komuter and RapidKL. Among others, buy more coaches, increase frequency and extend the network for all three - LRT, Komuter and RapidKL buses. Then, and only then, the government may introduce the congestion charge. In addition, the government migh want to give direct subsidy to three targetted groups - school children, warga emas & OKUs. As an idea, the school children is travel for free in London.

However, the measures I mentioned above is only to ease the cost to commute for general public.


To be continued...