Saturday, June 07, 2008
Time for prudent spending
| Saturday, June 7th, 2008 | ||
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Time for prudent spending
A bitter pill for Malaysians to swallow following 40 pct hike in price of gasoline
KUALA LUMPUR: There is no other choice but to be thrifty.
That is the “bitter pill” Malaysian consumers have to swallow following the 40 per cent hike in the price of gasoline.
This is expected to have a “domino effect” on other consumer goods and services.
The end result is what the people fear most, that is the spiralling cost of living.
Many were caught by the unexpected price increase as they had expected it to take effect in August.
The pump price of petrol effective June 5 is RM2.70 for a litre, up from RM1.92 while diesel now costs RM2.58 a litre compared to RM1.58 previously.
This is the highest fuel price hike in the country so far.
The last time the country experienced a substantial pump price hike of gasoline was on Feb 28, 2006 when the price for petrol went up by 30 sen a litre.
And, despite the latest price hike the government is said to be still subsiding the cost of fuel to the tune of RM18 billion a year.
The worst possible scenario is that the public may have another huge load on their shoulders when one day the government decided to do away with the subsidies on gasoline.
Secretary general for the Federation of Malaysian Consumers Association (Fomca), Muhammad Sha’ani Abdullah said the people should realise that petroleum is not a resource that can be replenished.
He said, the government should come with a plan for a sustainable production of this commodity.
“Malaysia as the producer and exporter (of petroleum) should be prepared for 2014 when the country is expected to import to meet its needs and in the 2020’s, the country is expected to be fully importing the petroleum,” he said.
Meanwhile, the government, he added should meet its pledge in trying to reduce the heavy burden faced by the people in view of the spiralling cost of living.
He said, the government should ensure that it spends the tax payers money prudently and be transparent and accountable when allocating the funds for the respective sectors.
“The cash rebate (for the fuel price hike) should not be the only form of assistance to the people.
“The government should also provide more relief on the telecommunication services, water supply, public transport fare, health, education and housing as well as TNB tariff.
“This is crucial towards lessening the socio-economic on the lower and middle income groups,” said Muhammad Sha’ani.
Prime Minister Datuk Seri Abdullah Ahmad Badawi, when announcing the restructuring of subsidies for gasoline on June 4, said the government would pay cash rebate for owners of private motorised vehicles.
Owners of private vehicles that have the cubic capacity (cc) of 2,000 and lower, as well as pick-ups and jeeps of up to 2,500cc are lined for RM625 cash rebate each a year.
Meanwhile owners of motorcycles of 250cc or lower are entitled to RM150 each a year.
In the wake of the latest fuel price hike, the government should direct all of the government-linked companies (GLCs) to review the rate of services offered to the public.
“Some sort of revision should be made in order not to burden the lower-income earners, like doing away with the monthly subscription,” he said.
Muhammad Sha’ani also called on the government to direct financial institutions to reschedule loans taken up by the public or provide long-term facility for those who have credit card and overdraft problems.
The government should also direct the Employees Provident Fund (EPF), via the Malaysian Building Society Bhd (MBSB) and Syarikat Perumahan Negara Berhad (SPNB) to provide interest free housing loans or that with low interest for the low-income earners.
Before this latest hike of pump fuel price, the wallets and purses of Malaysians are already getting thinner.
Right from early this year, the price of consumer goods and services is steadily and gradually on the rise.
It may be not too much of a strain for the rich, but for those who are already finding it difficult to make ends meet, the scenario has turned worse.
“The impact from the latest fuel price hike is going to burn a big hole in the pockets of the people, particularly those staying in the urban areas as they have to spend more on transportation costs.
“This will also spark a chain reaction towards production and transport costs,” said Muhammad Shaani.
Hence, the price jump of consumer goods and services is imminent, said Mohd Yusof Abdul Rahman who is Fomca’s communications director.
Mohd Yusof said on the average, Malaysians spend 40 per cent of their income on food.
“The price of goods would definitely make their spending higher to about 50 percent now.
“The price of processed food will go up as the raw materials would be more costly due to the higher transportation charges.
“Hence, restaurants and food stalls are expected to raise prices,” he said.
Mohd Yusof advised Malaysians to review their budget, lifestyle and spending habit in accordance with the latest development.
“They need to be thrifty in their life. If they have some spare land near their house, they can start planting vegetables. For those staying in high-rise like apartments, they can use the pots or the hydroponics method,” he said.
“Whenever possible, try to car pool and use lower cc vehicles as they consume less petrol.
“Also try to cut down the expenses on utilities like telephone, water and electricity,” he said.
Mohd Yusof also urged mobile telephone users to use more of the SMS service instead of making calls as the sms is much cheaper.
“They should also do away with the superfluous accessories like ringing tones, tips, horoscope and games,” said Mohd Yusof.
— Bernama
