Sunday November 2, 2008

Scrap fuel subsidy as it does not help the poor, says Fomca

PETALING JAYA: Instead of considering a new fuel subsidy rebate system, the Government should just scrap fuel subsidy altogether, said the Federation of Malaysian Consumers Association (Fomca).

Its secretary-general Muha­mmad Sha’ani Abdullah said the rebate system did not do much to help alleviate the burden of the lower income group.

Sha’ani said the funds should be channelled towards the public transportation system and other social services like housing interest rates.

He said the Government needed to come up with a proper mechanism to take care of the lower income group, and not just anybody.

“Otherwise it would be a waste of funds. The rich and the poor will be enjoying the same fuel subsidies.

“The buyer of a low-cost house faces the same interest rates as that of a millionaire wanting to buy a bungalow. Subsidies should only be channelled to the lower income group,” he told The Star.

He said just because the price of fuel had gone down, the Government should not use it as an excuse to delay the development of an efficient public transportation system.

“The Government cannot ignore the matter just because they reduced the prices of fuel.

“Public transportation is still very important in the long term for the lower income group,” he said.

Asked if higher fuel prices, due to a lack of subsidy, would cause prices of goods to go up, Sha’ani said it was unlikely as the prices had already shot up when petrol price was raised to RM2.70 a litre in June.

“The issue here is not about lowering prices of goods, but increasing the purchasing power of the lower income group,” he said.

# posted by share n care @ 6:44 AM