Wednesday, June 4, 2008

June 5: A Killing Moment For Malaysians

'Flip-Flop' Dollah Badawi has thrown every working citizen in major towns that have vehicles in chaos announcing that the price of oil would be up by another 78 cents to $2.70 per liter from tomorrow onwards, which is another 40 percent increase from the last price of $1.92 in February 2006. However, there will be an annual rebate of $625 for under 2000cc vehicles / $120 more motorcycles under 250cc, which will be given upon renewal of road tax. But it does little to make people happy.

There Will Be Screaming

What will happen tomorrow? According to a interview article by Malaysiakini, people, consumer organizations and activists are starting to scream particularly at Dollah Badawi for a sudden decision. The much better alternative is to announce that and introduce on the go from August 1. That will give people more time to get use to the pounding situation that is now. The people still remain unhappy now that the cost will spill over to the cost of food and transport which is going to tax other people. Of course, Dollah Badawi will say, 'I am sorry, but there is nothing I can do.' But they are not going to buy that thing.

Dollah's Last Fling of The Dice

Dollah has taken a huge bet, political risk and gambled on the fact that people will accept it but if he loses the bet, people from the outside and the inside will start going after him again, adding more pressure to his reputation after the March 8 election. Public anger will never recede after all! Also, in this situation, the opposition will tell the people that BN has again failed the people, failed to handle the nation's economy and corruption. You might want to question those BN loyalists. Why did they vote for BN!? It is those who vote for them that do not seem to see the long-term consequences. Of course, it will be in Anwar Ibrahim's favor, waiting for another moment before he takes over the government.

In many of the Anwar speeches, he did say that he will reduce the petrol price if the opposition wins the election. But then, what they did was accomplishing the primary target of denying 2/3rds majority for the Barisan Nasional. He did mention of using a portion of Petronas net profits, to reduce the subsidy bill. According to government officials, the projected subsidy bill for this year is estimated to be at $56 billion. Giving of high oil prices, Petronas stands to profit at least 2 times more than previously. Taking 25% of for subsidies and using some of it for development will at least reduce, not totally reducing the bill. There has been a question by some quarters of where is the balance of the money from Petronas royalties and taxes?

A few days ago, Malaysia has indicated its refusal to use the ringgit as the form of the monetary policy tool, mentioning that the market will dictate the direction of the currency. Basically, you don't let someone decide for you, you have to decide for yourself. That is a mistake that Malaysia has did. If they manage to appreciate the ringgit to at least 2.8 right now, the government is standing to save at least $8 billion alone. Do you see why Singaporeans have better buying power than here? It's because that they use the Sing dollar as a monetary policy!

Is Rebate Good Enough?

Let's do some calculations. As for my case, I basically pay at most $280 per month for petrol alone, which translates to $70 Max. The average I'd pay is at $60 plus per week given that I tend to fill once a week. The car that I drive has a capacity of 38 liters full, that means I'd fill at most at 30 liters per week.

So, I'd pay roughly $57.60 given at 1.92 per liter and 30 liters. If the price stands at 2.70, I'd pay about $81 per month, which is another 33 percent more than a previous weekly oil bill. The annual rebate is $625 for a under 2000cc vehicle, meaning max $52 per month or $13 per week. If I pay $81 minus the rebate, then after rebate, I'd only pay $63, which is just paying another $3 dollars more. That is if you fill up once a week or so. But what about those who frequently travel? It can do good and it can do harm. In my case, it stands to reduce some burden really.

No, it does more damage to the public transportation particularly the disabled ones.

Ulterior Motive?

Someone said that Dollah Badawi and his cronies will not be able to reap big profits given of the political scenario and by taking advantage of the current crude oil prices, they hope to level the problem, by letting the people take the burden instead of them. While some political-minded people might think of it, but I think that it shows that you have a prime minister that doesn't even know economics as what Anwar claimed.

There is a so called 56 billion ringgit question which claimed that the government has enough and pass the baton to the people to buy petrol at a higher price.

Other Countries Pay Less!

Look at the chart above. I think we should somehow deserve to enjoy paying a little more than UAE. But it's the mismanagement of money by BN / UMNO that plays part of it.

Last Words

I think this has been the sixth time in four years that Dollah Badawi has increased the petrol.

At this time, I could have been like Eric Cantona, going up to stupid voters who picked BN in Pahang, Johor and Negeri Sembilan and screaming 'IDIOT' at them.

Pukul Dollah and BN....that's what people's statement is likely to be. One of a few.

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