Thursday, September 08, 2005
Malaysia will hold off fuel price hike till end of the year
Radio Singapore International - Newsline
The Malaysian government will be reducing road tax and freezing highway tolls to cushion the impact of fuel price hikes in the country.
The package of measures to curb inflation, which was announced yesterday, also included stabilizing petrol, diesel and cooking gas prices till end of the year, and increasing welfare funds to help the poor.
The government's moves came after prices of consumer goods increased in the last two months.
The Consumer Price Index reached a seven-year high at 3.0% in July.
Melanie Yip spoke with Mr Muhammad Sha'Ani Bin Abdullah, Secretary General of the Federation of Malaysia Consumer Associations to get his reactions to the government's counter-inflationary measures.
MSB: In our opinion, it is just a start. We are not very encouraged by it. Savings to the consumers are not much. But it will have a psychological impact on the traders who are actually influenced by the rising prices and other considerations, and this will put them in the mood to increase their prices.
From the consumers association point of view, are there measures taken to monitor the price levels of other commodities like electricity, water, health care, public transportation which are of concern to the consumers?
MSB: Actually, our request to the government was to put a cap on all the utilities prices, that includes electricity, water and also telecommunications. And also healthcare and education. And these form part of our memorandum, that we want the government to put in some form of control or cap, and even on the property rental. This will actually give better benefits to the consumers when the prices of goods are increasing. We hope in the coming budget session, the government will consider these pointers so that consumers can enjoy the pace economically, and to survive in the situation.
Do you anticipate any of these commercial enterprises to reciprocate the government’s inflationary measures by lowering their prices as well?
MSB: We doubt they will lower their prices or rates. In fact, they are requesting for an increase in rates. So this government decision will provide some basis for them not to increase or for the government to say not to increase their rates. Like utilities companies have requested to increase their rates, saying that their last revision was quite some time back. But we feel due to these latest developments in fuel price increase, we hope the utilities companies will consider on the basis of social responsibility, to postpone their plans to increase the rates.
The government has warned traders against taking advantage of the oil price increase and will step up on enforcement measures to protect the consumers, could you perhaps elaborate on what some of these enforcements measures might be or should be?
MSB: Legally, the enforcement can only control the essential goods, or goods that have been described as control items. Other than that, the government cannot control the prices. But they can actually request for the traders to cooperate, to refrain from increasing the prices. And also, maybe they can take action on the basis of excessive profiteering, when looking at the base prices, they increase too much, then the government can take action on that. Other than that, the government can designate certain essential items or additional goods, and put a cap on the price. By doing that, then the enforcement officials can act on those who increase beyond the controlled prices.
What is the impact of some of these measures like fuel price freeze and increase in welfare for the underprivileged on the country's aim to reduce its budget deficit?
MSB: Of course, with these considerations, the impact on the budget deficit will be very high. These conditions were unforeseen when the budget went down, so with the current situation on the world fuel prices, we have to adjust our measures so that consumers can have a better cost of living. Maybe we have to go into a deficit again, or prolong the period that the country is going to be in a deficit.
Mr Muhammad Sha'Ani Bin Abdullah from the Federation of Malaysia Consumer Associations. He was speaking with Melanie Yip.
September 8, 2005
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The package of measures to curb inflation, which was announced yesterday, also included stabilizing petrol, diesel and cooking gas prices till end of the year, and increasing welfare funds to help the poor.
The government's moves came after prices of consumer goods increased in the last two months.
The Consumer Price Index reached a seven-year high at 3.0% in July.
Melanie Yip spoke with Mr Muhammad Sha'Ani Bin Abdullah, Secretary General of the Federation of Malaysia Consumer Associations to get his reactions to the government's counter-inflationary measures.
MSB: In our opinion, it is just a start. We are not very encouraged by it. Savings to the consumers are not much. But it will have a psychological impact on the traders who are actually influenced by the rising prices and other considerations, and this will put them in the mood to increase their prices.
From the consumers association point of view, are there measures taken to monitor the price levels of other commodities like electricity, water, health care, public transportation which are of concern to the consumers?
MSB: Actually, our request to the government was to put a cap on all the utilities prices, that includes electricity, water and also telecommunications. And also healthcare and education. And these form part of our memorandum, that we want the government to put in some form of control or cap, and even on the property rental. This will actually give better benefits to the consumers when the prices of goods are increasing. We hope in the coming budget session, the government will consider these pointers so that consumers can enjoy the pace economically, and to survive in the situation.
Do you anticipate any of these commercial enterprises to reciprocate the government’s inflationary measures by lowering their prices as well?
MSB: We doubt they will lower their prices or rates. In fact, they are requesting for an increase in rates. So this government decision will provide some basis for them not to increase or for the government to say not to increase their rates. Like utilities companies have requested to increase their rates, saying that their last revision was quite some time back. But we feel due to these latest developments in fuel price increase, we hope the utilities companies will consider on the basis of social responsibility, to postpone their plans to increase the rates.
The government has warned traders against taking advantage of the oil price increase and will step up on enforcement measures to protect the consumers, could you perhaps elaborate on what some of these enforcements measures might be or should be?
MSB: Legally, the enforcement can only control the essential goods, or goods that have been described as control items. Other than that, the government cannot control the prices. But they can actually request for the traders to cooperate, to refrain from increasing the prices. And also, maybe they can take action on the basis of excessive profiteering, when looking at the base prices, they increase too much, then the government can take action on that. Other than that, the government can designate certain essential items or additional goods, and put a cap on the price. By doing that, then the enforcement officials can act on those who increase beyond the controlled prices.
What is the impact of some of these measures like fuel price freeze and increase in welfare for the underprivileged on the country's aim to reduce its budget deficit?
MSB: Of course, with these considerations, the impact on the budget deficit will be very high. These conditions were unforeseen when the budget went down, so with the current situation on the world fuel prices, we have to adjust our measures so that consumers can have a better cost of living. Maybe we have to go into a deficit again, or prolong the period that the country is going to be in a deficit.
Mr Muhammad Sha'Ani Bin Abdullah from the Federation of Malaysia Consumer Associations. He was speaking with Melanie Yip.
