PUTRAJAYA, Dec 3 — The price of fuel and sugar will go up from midnight tonight as part of the Najib administration’s ongoing drive to reduce subsidies, but it is fraught with political risks as he mulls early elections next year.
The price of RON95 will increase by five sen to RM1.90 per litre, diesel by five sen per litre to RM1.80 and liquefied petroleum gas (LPG) by five sen to RM1.90 per kg. Sugar will also cost 20 sen more at RM2.10 per kg.
Through these price hikes, the government expects to save subsidy payments of RM621.9 million on RON95, RM213.2 million on diesel, RM63.5 million on LPG and RM283.5 million on sugar a year, or a total of RM1.18 billion annually.
RON97 will remain on a managed float based on market prices.
This is the second wave of subsidy cuts following the first round of hikes on July 16, when prices went up by five sen per litre for petrol and diesel, 10 sen per kg for LPG and 20 sen per kg for sugar.
Performance Management and Delivery Unit (Pemandu) CEO Datuk Seri Idris Jala said today subsidy rationalisation was needed to bring down government expenditure.
“We are... doing this to make sure that our deficit is reduced. We are a responsible government. We will make sure that we will live within our means,” he said at a media briefing on the latest subsidy cuts.
Also present was Domestic Trade, Co-operatives and Consumerism Minister Datuk Seri Ismail Sabri Yaakob.
“One of the measures to reduce cost is to rationalise our subsidies because Malaysia’s total subsidies are higher than many other countries. Our subsidies are also not targeted at the poor. There’s quite a lot of leakages and abuses.”
The savings will be used to fund rural development, education, urban transport and other areas under the Government Transformation Programme (GTP), he added.
Idris stressed, however, that prices for fuel and sugar in Malaysia will remain one of the lowest in the region even after the subsidy cuts take place.
“Even after we have put this five-sen increase... our selling price for RON95, and also LPG and diesel and sugar, is still lower than Indonesia, lower than Singapore and lower than Thailand,” he said.
The minister in the Prime Minister’s Department was heartened by fair public reception to the last round of subsidy cuts, which he attributed to the government’s success in keeping inflation under three per cent.
“The CPI (consumer price index) increase was very, very small and that is why, when we did this, it was well taken by the public and the public didn’t really feel financially disadvantaged,” he said.
“We are controlling inflation in this country despite the first wave of increases. Because it’s very small increase, we are still able to contain everything so that does not put any burden onto the people.”
Idris said the government would take into account public feedback and the strength of the economy before deciding on when to make further moves to cut subsidies.
He added that renegotiation of independent power producers’ (IPPs) contracts was ongoing but declined to comment on the status. - The Malaysian Insider
This has been much of expectation to come when Idris Jala and Sabri Yaakob called for a 3 p.m meeting for a "second wave" of subsidy rationalisation (actually it's a con word for reduction). I don't really believe that reduction from subsidy is going to help much since a bulk of the money is used for amassing campaigning resources to ensure BN winning Batu Sapi last month.
Let's make it clear and simple. If you vote for BN, be prepared to pay the price like this. They are virtually bankrupt of ideas and the current national debt stands at RM 550 billion, which means, we are in the red margin, not in the black, as what the newspaper would say. I have already warned people many times that their fate and future lies on whom you pick and picking the wrong person means "grim future". As to recuperate more money from bad debts, there goes the service tax increment next year, the insistance of having saman ekor, the hasty implementation of the AES, Rosmah kicking Hassan Merican out of Petronas, etc..
Macam-macam digunakan untuk menipu rakyat!
What most people do not know is that subsidy reduction is part of the ECONOMIC HIT MAN suggestion to the politicians / government. The following is an excerpt from the book Confessions of an Economic Hitman:
The G8 nations, World Bank and IMF are once again exploiting these nations and they are calling it "debt forgiveness". They are insisting on conditionality that are cloaked in phrases like good governance, sound economics and trade liberalization. While the language is enticing, it is also terribly deceptive. These policies are good and sound only if you are looking through the corporate windows. The countries that agree to such conditionality are called upon to privatize their health, education, electric, water and other public services - in other words, sell them to the corporate. They are forced to drop subsidies and trade restrictions that support local businesses while at the same time accepting that the U.S and G8 countries can continue to subsidize certain G8 businesses and erect trade barriers on imports that threaten G8 industries.
Removing subsidies on RON 97 and instead giving only to RON 95 is actually deceptive too. With that it gives an excuse to the government to increase the price when the appropriate moment comes. Everyone is pushed to one side, that is almost everyone using RON 95, just because of the mere arguement that RON 95 is okay, though not as great as RON 95. In other words, sacrificing quality for the price. This is actually a daily con job that most people do not seem to be aware about. And yet, people have blind faith over something that is not really true.
I suppose they need not say anything. The fact that they are in Barisan Nasional, and Umno is the lead partner in Barisan Nasional, and Umno upholds and propagates Ketuanan Melayu, means that the non-Malays also support Ketuanan Melayu. They don’t have to make statements saying they support Ketuanan Melayu. The fact that they remain silent and remain in Barisan Nasional is an indication of their support for Ketuanan Melayu.
And the non-Malays scream and curse Umno. How stupid when it is the non-Malays who make Ketuanan Melayu possible. Bodoh! - RPK - Indians and Chinese support Ketuanan Melayu
The only problem is complacency attitude by the people. The people themselves are to be blamed for the mess. They made the wrong choice. Period. Blaming the politicians can come second to none.
Do you think that the third wave is coming by May next year?