In Business School, the Professors and the lecturers taught us that before one embarks on any new ventures or projects, there should be several studies preferably conducted by external consultants. Market research, feasibility studies, business research and whatever you care to call it, is the standard practice in business. You just cannot go by gut feeling or intuition alone especially if it involves many stakeholders. The same thing applies to government agencies and departments. In the face of scarce resources, only research can answer certain pertinent questions. Without proper research one is cooking the figure and plucking the numbers out of the thin air.
Now, the article below is taken from NSTonline relating how a Professor Danny Quah, based in London claims that Malaysian public can afford another 40-sen hike in the price of petrol. Where does he get the figure? Has he never heard of the term " spiral effect" or "cascading effect" in relation to any increase in the price of petrol? How do goods get transported from one place to another? Machines and equipment run on water or diesel? Generators and turbines in Power Stations owned by TNB and the Independent Power Producers run on solar or diesel? People go to work mainly by bicycle, on foot or petrol or diesel-run vehicles?If the cost of production or supply of goods and services have gone up due to an increase in petrol and diesel prices, would that increase be born by the end users like you and I. If the cost of production or provision of staple foods have gone up as a direct result of the increase in petrol or diesel, would there be an automatic increase in the price of that particular goods? You help me answer that questions.
The Economic Planning Unit staffs should come out of their cocoons and air-conditioned office and venture outside to ascertain the economic condition of the average Malaysian. The Central Bank or BNM must perform surveys and research on the fields.
As revision, the GDP per capita figure is a measure of the average income of a country's citizen. In other words, it shows how much in proportion a country's GDP each person would have if GDP were divided equally. GDP does not show how income is distributed- the disparity in income between the rich and the poor. Even though it shows average income, it does not show whether Mr Citizen and Mrs citizen lead a fulfilling lives and what their buying powers are.
Let you be the judge of his luncheon talk and some of readers comment.
Expert: Economy can bear 40-sen rise in petrol price
KUALA LUMPUR: Malaysia can raise petrol prices by 30 to 40 sen a litre in the short term without hurting economic growth, an expert with the London School of Economics and Political Science said.
"The economy can withstand an increase of petrol prices by 15 to 20 per cent, or 30 to 40 sen, a litre. But the government has to quickly move with a direct compensation system."
Quah said fuel subsidies should be removed in stages to let society adjust to the more expensive petrol.
At the same time, the money saved from providing the subsidies needed to be transferred back to help the poor quickly and effectively.
"You'll have to get people used to the idea, in particular that they are going to be compensated by transfers or other kind of direct payments once these subsidies come off.
"It's obvious that once these subsidies come off, prices will rise. For the very poor, goods that are expensive but are essential will place them in dire straits.
"So the government should get people used to the idea that as the subsidies are progressively dismantled, people will see compensation for that," he said.
He said inflation would stabilise after a while, although consumer prices may spike immediately after the subsidies were removed.
"In the short term, shocks can hit the system. A removal of subsidies may raise inflation to five to six per cent in that particular year, but it will not be an on-going inflation," he said here yesterday after giving a luncheon talk to LSE alumni.
He earlier held discussions with the Domestic Trade and Consumer Affairs Ministry.
It is understood that the government has consulted Quah on the different aspects of inflation, the problems of subsidy and the ways to reduce poverty. Quah said the government was studying how best to remove petrol subsidies without hurting the poor. Social unrest in countries like Indonesia also suggested that this issue be dealt with care.
Oil prices reached another record of US$135 (RM472) per barrel last week. Fuel subsidies are expected to cost the government RM56 billion this year.
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Daniel, Kuala Lumpur: I agreed with Professor Danny Quah. This will also make M'sian to be more selective when buying a new car. Modern cars are more fuel efficient & less harmful to the environment. Cars 20 years or older should be discourage to be on the road. Just like the toll fares. The question is the infrastructure needed to address the different prices. The public and private sectors seem to have common finishing office hour ie. 5pm. Different closing hour will save the country a lot of petrol and also oil subsidy. Police help at this hour will help ease traffic and directly save petrol when traffic is moving smoothly. Build more bicycle lanes with trees lining them....,oil is finite and the future scenario is not so good. What we have to learn here is that we need to find other alternatives like fusion power plants, solar or other sustainable resources, and use them, for instance, we could use more electric transports, like trains (Maglev's) light rails, etc. All of these electric transport systems are available today, some even for many years already, the future is with sustanable energy and resources, if we ( or even the world ) can spend so much for new warfare technologies, then why can't we divert some of these funds for the development of our future. Like Bernard of Kuching says, oil is finito! GONE!, but it's still not too late to pool our brains together to solve this problem, do not wait till it is too late! We pay huge excise duty for cars, far more than we can consume in fuel subsidies. An example: The Honda Civic 1.8 costs RM113,800 here whereas it costs ~RM73,563 (unsubsidized) in Thailand. We'll call the difference to be RM40k. Fuel in the US costs USD3.76 per US gallon (unsubsidized). That works out to around USD1 or RM3.25 per litre. Petrol costs RM1.92 per litre here. The difference per litre = RM1.33. So, to recoup my excise duty and other random enrich the government taxes, i have to use 30075 litres of subsidized petrol. Let's assume 1 litre of petrol = 10km. If i drive 600km a month (10km to work, 10km back, 30 days), i use 60 litres of petrol a month. I would have to drive for 500 months, or 41.7 years before i get my excise duty back in subsidy. Do you think my Honda Civic can last for 41.7 years? In summary: All malaysians should remember - the government actually profits from us, the people, via excise duty vs fuel subsidies AS IT IS. And they want to make petrol more expensive. This is ridiculous. Give me an untaxed car. Then i will pay (gladly pay) full price for fuel Pengusaha bas minta naik tambangOleh Amin Ridzuan Ishak Berita harian Online KUALA LUMPUR: Persatuan Pengusaha Bas Seluruh Malaysia (PMBOA) memohon untuk menaikkan kadar tambang bas ekspres dan bas berhenti-henti di seluruh negara sebanyak 100 peratus bagi menampung peningkatan kos operasi serta alat ganti. Mengikut cadangan PMBOA, tambang bas ekspres berhawa dingin di Semenanjung perlu dinaikkan kepada 15 sen untuk jarak satu kilometer (km) berbanding 6.5 sen setiap km kadar sekarang. Bagi perkhidmatan bas ekspres tanpa penghawa dingin pula, PMBOA memohon kenaikan tambang sebanyak 10 sen setiap kilometer berbanding 5.5 sen yang dikenakan ketika ini. "Bagi laluan berbukit pula, kami memohon supaya dibenarkan caj tambahan sebanyak 20 peratus lagi daripada kenaikan itu," katanya. Di Sabah pula, PMBOA memohon tambang bas berhenti-henti berhawa dingin dinaikkan kepada RM1.50 bagi dua km dan 20 sen bagi setiap km berikutnya manakala yang tidak berhawa dingin, kadar dicadangkan adalah masing-masing RM1 dan 15 sen untuk jarak laluan sama. |
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