Saturday 22 November 2014


My brother told me that most people he talked to were unhappy that the government is doing away with the RON95 subsidy.

I do understand why some people are protesting against it - mostly because every petrol price hike had always been accompanied by higher prices of goods and services.

So there is an expectation that without the subsidy, petrol prices would increase, and that would lead to increase in prices of consumer goods and services.

For the majority of the lower income group, I believe that they are most affected by the increase in prices of consumer goods and services associated with petrol price increases, not the actual petrol price increase itself.

As for me, from a purely practical perspective, I agree that we should do away with fuel subsidies, and now is the best time to do it what with the sharp falls in global crude prices.

Other countries are taking advantage of the lower crude prices to reduce or even do away their petrol subsidies too.

However, I am just way too lazy to lay down my reasoning in detail here - I'd rather waste my time with my digital dolls.

If you insist, read about what is happening and being said elsewhere about petrol/fuel subsidies here, here, here, here, here and here.

Or you can just google for "fuel subsidies" within the past week and you will have a whole lot of references.

Just don't read the Opposition blogs - they are experts in taking advantage of any situation to fan the anti-anti-government sentiments, hence are not reliable sources of facts and data.

Oh, and read up about the local perspective here at Economics Malaysia.

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