Seng in his blog had made some calculation which I find it very interesting if not enlightening. Datuk Shahrir, DSAB and his think tank should read the post in link below.
Comments by Salvatore_Dali
malaysiafinance.blogspot.com/ 1. How Much Government has Taken Away
Well, according to Shahrir, the total Subsidy per annum is RM56 Billion. By raising Petrol from RM1.92 to RM2.70, government subsidy should reduce. The question is how much? Well, we can roughly estimate this since we know that the RM56 Billion subsidy relates to a market price of RM3 per litre. So: - $1.92 to $2.70 : (2.70 - 1.92) / (3 - 1.92) x 56 = RM40 Billion. - $2.70 to $4.00: (3 - 2.7) / (3 - 1.92) x 56 = RM16 Billion. Total = $40B + $16B = RM56 Billion. In short, by raising petrol from RM1.92 to RM2.70, the gross savings is approx $40 Billion (gross = before deducting the blue items & expenses), with the government continuing to subsidize RM16 Billion. Note also that the RM40 Billion figure is an under-estimation for the following reasons: - The price rise in Diesel is much higher than Petrol, so, this should save the government more. - I have not factored in the savings resulting from the other measures in Purple. These Purple items are not small items, but for the purpose of this article is not necessary to show that the Government numbers don't add up.
2. Cost of Rebates
Fellow chatter "starter" has sent to me the following statistics from the Road Transport Department on the number of cars & motorcycles in Malaysia. - Number of cars = 7,386,134. - Number of motorcycles = 7,942,707 - Total vehicles = 16,758,311 (which is larger than both above. Difference = 1.4 million vehicles) Note that number of cars includes above and below 2000 cc. Number of motorcycles include above and below 250cc. But for conservatism, I have used all to over-estimate and be generous in the Total Rebate figure to be nice to the government. So, Estimated Gross Rebate = 7.4 million x $625 + 7.9 million x $120 = RM5.6 Billion. Note that this number RM5.6 Billion is relatively insensitive to changes in the exact number of motorcars and motorcycles. Feel free to change the numbers yourself. The reason it is insensitive is because the numbers RM625 and RM120 is small.
3. How Much Government Save?
Net Savings = 1 - 2 = 40B - 5.9B = RM34 Billion
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