Thursday, June 05, 2008

A Painful but Necessary Evil

Oil has always been a decreasing commodity and the recent rise in global crude prices which passed to USD120 per barrel and not stopping in its upward hike is a potent sign of change. The realities of increasing fuel prices must have been evident to everyone here in Malaysia that the sweet days of cheap fuel will one day end. It was just that no one thought it'd end so soon and hike so high as it did midnight today. I believe everyone knows that subsidies cannot last forever but still it is a shock, especially since for one public transport in Malaysia is a farce, two there is no alternative transportation mechnaism besides private transport to get from point A to point B and three oil prices are the backbone for any further increase in the cost of living while wages are not increasing in tandem with inflation. Other countries are still paying much more than us but this may soon change as well. People out there must be mad, worried and fearful what it means as a oil price increase will affect every economic pricing in our daily lives. It seems that our friendly neighbourhood 'economy rice' stalls would soon see a change in signage to 'Non-Economical Rice' in the near future. If you noticed the jams tonight from the long queues of vehicles hoping to taste the sweet low fuel prices for the last time, you can expect that the effects are acute.

It is a double edge sword, a decrease in subsidies means savings in the form of government spending of tax payer's money for other purpose say education, job creation and health care but at the same time, a sudden hike and shock in increase pricing would mean hard times for the lower and middle income groups. The increase in prices should also mean a higher priority and impetus to ask for change, especially with savings in subsidy payments, to public transport, alternative energy sources and a change in the mindset and lifestyle of most people. It is a painful event, one not solely blamed onto the present government but I don't envy them making this decision as there will surely be a political outfall, for better or worse, as the rakyat vent their frustrations and anger. It is hard enough already to be asked to tighten our belts further and it does not look to be getting better in the long run. It will be worrisome if an economic slowdown occurs as prices rice and the cost of daily necessities escalates. We should be weaned off subsidies but that doesn't mean it does not smarts. Today I will wake to the reality of a RM2.70 per liter pump.

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