Wednesday, June 04, 2008

Petrol up 40%


Well, it's finally happened. The govt has removed most (all?) of the subsidies for petrol and diesel.

These subsidies were unsustainable anyway, with as much as RM40 Billion (with a B) paid out last year. That was money not being spent on infrastructure development, healthcare, education, public safety or agricultural programmes.

All kinds of money-making schemes arose as a result of these fuel subsidies, particularly smuggling or reselling. Economists would call this "arbitrage". Worse, we (the taxpayers) were subsidising the Thais, Indonesians, and Singaporeans, who earn more than us.

Anyway, here's what you need to know:

Petrol
From RM1.92 to RM2.70 (up 40.6%)

Diesel
From RM1.58 to RM2.58 (up 63.3%)

Take note of those percentages, because business owners will have to pass on these costs to consumers.

I'm a bit more fortunate than others, because I get around mostly with my kapchai (low-cc motorcycle). A full tank for my kapchai, which lasts 3 days, used to cost me about RM5.30. Now it'll cost me RM8.00. I expect kapchais will become more popular after this.

Plus, I hope there's a push for more fuel-efficient vehicles and also alternative-fuel vehicles.

(Image ganked from Waleska Alsieux's blog.)

1 comment:

Mohamed Rigval Reza said...

Hey Lee Meng,

Have a look at yesterdays NST. It seems that the subsidy actually started in 2004. prior to this, it was the govt collecting minimal or no duty from the sale of each liter. I.e Our Govt was earning from each liter sold! I guessed as much actually, as I remember saying 'What Subsidy?' a few years back.

Regards