Prices Of Sugar, Petrol, LPG, Diesel To Go Up As Subsidy Cuts Start
The price of petrol, diesel, natural gas and sugar will be increase tomorrow as the Government is starting to cut the subsidies.
The RON95 petrol and diesel prices will go up by five sen a litre. Tomorrow’s pump price will be RM1.85 per litre for RON95 and RM1.75 per litre for diesel. Subsidies for RON97 have been removed completely and its price will be subject to market forces.
Natural gas (LPG) will rise by 10 sen per kilogramme to RM1.85.
The price of sugar will also be increased, by 25 sen per kilogramme to RM1.75.
Prime Minister Datuk Seri Najib Razak said the move to cut subsidies on fuel and sugar – which he termed “upward price adjustments” – would save the government RM750 million in subsidies this year.
“The readjustment of fuel and sugar prices are minimal compared to the proposals submitted because the government wants to balance between maintaining the people’s interests and the need to manage the country’s deficit,” he said.
So do expect to see more hike like introduction of an unpopular Goods and Services Tax (GST) and further market liberalization.
This surprise move will surely makes people unhappy and higher possibilities of sparking a rise in prices of other goods and services.
It could have serious political repercussions for Prime Minister Najib Razak!
Look at how much your RM10 can Buy now?
It look like Your RM10 is now worth in actuality only RM3 in real terms!
On May 27, Minister in the Prime Minister’s Department Datuk Seri Idris Jala had controversially predicted Malaysia could be bankrupt by 2019 if it did not begin to cut subsidies for petrol, electricity, food and other staples, which he said cost the country RM74 billion last year.
Instead of cutting subsidies for petrol, electricity, food and other staples, the Government should do more to eradicate corruption, mismanagements and put more control on illegal smuggling of goods. Therefore the Government should address any loophole in the management of public funds first before removing any subsidies.
Removing subsidies should be the last resort!
Else do expect more inflation spiralling and huge mismanagements. I am sure you have heard enough of scandal issues right from submarine, PKFZ, Sime Darby and not forgetting Felda issue!
5-in-1 price hike: Fuel, sugar and gas up:
- RON95 petrol – RM1.85 a litre.
- Diesel – RM1.75 a litre.
- Sugar – RM1.75 per kilogramme
- Natural gas (LPG)- RM1.85 per kilogramme
New Natural gas (LPG) price:
- 14KG Tank – from RM24.50 to RM25.90 (RM1.40 increase)
- 12KG Tank- from RM21.00 to RM22.20 (RM1.20 increase)
- 10KG Tank – from RM17.50 to RM18.50 (RM1.00 increase)
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Prices of sugar, petrol, LPG, diesel to go up Friday
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Subsidy removed for RON 97 petrol
KUALA LUMPUR: From Friday, the subsidies for sugar, petrol, liquefied petroleum gas and diesel will be cut as part of the gradual subsidy rationalisation programme, according to a statement from the Prime Minister’s office on Thursday.
The price of sugar will go up 25sen to RM1.75 per kg; LPG will go up 10sen to RM1.85 per kg; petrol RON95 will be up 5sen to RM1.85 per litre and diesel will be up 5sen to RM1.75 per litre.
RON 97 will no longer be subsidised. It will be subjected to a managed float, where the price will be determined by the automatic pricing mechanism, the statement said.
The details of these changes are now available on the PMO and PEMANDU websites, at: www.pmo.gov.my and www.pemandu.gov.my.
On May 27, Minister in the Prime Minister’s Department Datuk Seri Idris Jala had said that Malaysia would be bankrupt by 2019 if it did not cut subsidies and rein in borrowings.
He had said that Malaysia’s debt would rise to 100% of GDP by 2019 from the current 54% if it did not cut subsidies.
Meanwhile, In ALOR SETAR, Prime Minister Datuk Seri Najib Tun Razak said that when implementing the subsidy rationalisation plan, the Government would seek not to burden the people.
He said the rationalisation move was necessary to reduce Government expenditure and strengthen the financial position of the country.
“It will help reduce the fiscal deficit so that world and local markets will have more confidence in the national economy,” he told newsmen after opening the Kuala Kedah Umno division meeting here on Thursday.
He added that the Government was reviewing all types of subsidies.
The full press statement from the Prime Minister’s office is below:
1. To help Malaysia maintain the strong growth it has achieved, the Government has implemented difficult but long-needed economic reforms that will help Malaysia become a developed and high-income nation. In this regard, the Government has begun a planned and fair reform of a subsidy regime that for too long has been ineffective in helping those who need it most and, over time, has become a barrier to Malaysia’s progress.
2. The Government has made bold economic decisions over the past two years. Two stimulus packages were introduced, promoting growth, even as the global financial crisis spread. Important sectors of our economy further liberalised were opened to new investment.
The Government cut spending by RM24 billion, by reducing waste and inefficiency. As a result, the country’s economy has been reinvigorated, with 10.1% growth in the first quarter of 2010, Malaysia’s best performance in a decade. Although there is still instability in the global economy, Malaysia is well positioned for the future – not by chance, but by the choices we have made together.
3. As set out by the Prime Minister when he announced the 10th Malaysia Plan, Malaysia’s national goals cannot be achieved by simply managing through a crisis. Malaysia’s ambition is to be a high-income nation, with opportunity for all.
4. In the New Economic Model, the Prime Minister set out plans for further investment in key strategic sectors, upgrading our infrastructure, creating additional private sector investment opportunities and realizing higher levels of GDP growth.
However, growth alone will not allow us to meet our goals. As the Government has consistently said over recent months, we must also implement subsidy reforms that will remove distortions in the marketplace and enable us to better target our resources on those most in need, and on investments that will provide lasting benefits for Malaysians.
5. With these priorities in mind, the Cabinet has decided that, effective 16 July 2010, subsidies for fuel, specifically petrol, diesel and liquefied petroleum gas (LPG), as well as sugar, will be reduced as the first step of a gradual subsidy rationalisation programme.
Subsidies for RON 95 and diesel will be reduced by 5 sen per liter. LPG will be reduced by 10 sen per kilogram. RON 97 will no longer be subsidised. It will be subjected to a managed float, where the price will be determined by the automatic pricing mechanism. For sugar, the upward price adjustment will be 25 sen per kilogram. The details of these changes are now available on the PMO and PEMANDU websites, at: www.pmo.gov.my and www.pemandu.gov.my
6. These minimal changes will help Malaysia achieve a position of fiscal responsibility and put us on a path toward reducing our deficit. To meet these objectives, we have chosen to make adjustments to our subsidies. Even after these changes, the Government will still spend an estimated RM 7.82 billion on fuel and sugar subsidies in 2010. The prices of fuel and sugar in Malaysia will still be among the lowest in the region.
7. This subsidy rationalisation will, according to estimates, allow Malaysia to reduce Government expenditure by more than RM 750 million in 2010.
8. The decision to reduce subsidies for fuel and sugar is based on the fact that reducing fuel subsidies will have the greatest impact on government spending and reducing sugar subsidies will allow us to promote healthier lifestyles. The decision is also grounded on three main concerns:
a. First, these subsidies also benefit foreigners and wealthier Malaysians, who can well afford to pay unsubsidised prices. Our focus should be on helping the family sharing a motorcycle or Kancil to get to work and school, but instead our spending on subsidies has provided the same benefits to those driving imported luxury cars.
The sugar subsidy disproportionately benefits industries, not families. Businesses have been using almost twice as much subsidised sugar as Malaysian households.
b. Second, highly subsidised prices often lead to illegal smuggling of these goods. Because subsidies make these products the cheapest in the region, in 2009 alone smugglers were caught heading out of Malaysia with more than 200 metric tonnes of sugar to be sold across borders.
Also, subsidised diesel continues to go to the black market or across our borders, instead of to those we meant to assist. Law enforcement have been doing their best to prevent smuggling, with 109 sugar related arrests last year. This is the tip of the iceberg. As long as there are big price differences, smuggling will continue. And:
c. Third, unless we reduce our consumption of fuel and sugar, we face potentially serious consequences as a nation. We are quickly depleting our domestic fuel resources. It is vital that we rationalise our fuel use – as well as develop new energy technologies – as a matter of economic, energy and national security.
In this regard, we have implemented a number of policies to protect the environment. We must also reduce our sugar consumption. 40 percent of Malaysians are now either overweight or obese.
Incidents of diabetes are rising quickly. Statistics show that the percentage of Malaysians with diabetes now exceeds that in the United States. We must, as a matter of urgency, take every step available to tackle what is clearly a public health issue for our nation. Reducing sugar consumption, among our children in particular, is a step in the right direction.
9. These are among the reasons why the Government has chosen to focus on sugar and fuel subsidies. Subsidies for education and health care will continue. These are areas of importance for our economy and our society where the Government should be investing.
These include, providing support to develop skills, training the knowledge based workforce of the future and improving the well-being of the nation.
10. The Government arrived at this decision following robust consultations with the people. Thousands of Malaysians participated in the policy labs, Open Day and an unprecedented public feedback process.
As with subsidy reform, the budget, the Government Transformation Program and now the National Key Economic Areas, the Government has made a determined effort to engage the public, listen and learn, and then act in the best interest of the nation.
11. These measures are designed to have a minimal impact on individual families, but long-term benefits for the nation. The reduction in expenditure from these reforms will allow us to better use resources for families, communities and business growth.
Measures such as the 1Malaysia clinics, the 1Malaysia mobile clinics, as well as the scholarships for all 9A+ and deserving students, specifically those who have done well, but come from lower income families, are made possible by such reforms.
Similarly, by reducing expenditure on subsidies we will be able to continue strengthening such initiatives as the price standardisation project, which seeks to harmonise prices of essential goods between urban and rural areas in Sabah and Sarawak.
12. The Government has made a difficult, but bold decision. By choosing to implement these modest subsidy reforms, we have taken a crucial step in the right direction towards meeting our commitment to reduce the fiscal deficit, without overburdening the Malaysian people.
These measures are a demonstration of our fiscal responsibility. They will enhance Malaysia’s financial stability, while also protecting the Rakyat.
Prime Minister’s Office
Putrajaya
15 July 2010
fr:thestar.com.my/news/story.asp?file=/2010/7/15/nation/20100715185830&sec=nation
All must do their part
The cut in subsidies will be unpopular, but it is the right thing to do, provided the Government watches its spending.
TEH tarik satu, kurang manis – that is the standard line when we visit our favourite mamak stall simply because Malaysians are too aware of the downside of consuming too much sugar.
Available statistics point to the fact that Malaysia has the fourth highest number of diabetes cases in Asia with 800,000 cases in 2007 and the number is expected to jump to 1.3 million this year.
The National Health and Morbidity Survey in 2006 revealed that 43.1% of Malaysian adults were overweight or obese, double the figure a decade ago. More frighteningly, hospitals are seeing cases of diabetes on the rise among teenagers aged between 13 and 19 in recent years.
If the trend continues, a report said, over 50% of the population would have the problem and a third would be diabetic well before 2020.
It isn’t clear if Malaysia would achieve developed status by 2020 but we can be pretty sure that we would be a nation of diabetic and over-weight people.
Malaysians can thank their over-indulgence in sweetened carbonated drinks and junk food for attaining this status.
The decision to cut down on subsidies for sugar and fuel will not go down well with the people, no matter how big or small the numbers. It can never be sweet when it comes to cuts.
Prime Minister Datuk Seri Najib Tun Razak has made a bold move. It will not be a popular decision, given the fasting and Hari Raya seasons ahead but it is the right decision. A good leader has to make the right decision.
There can also never be the correct time with a festival involving the various ethnic groups coming along almost every few months.
The current rationalisation on subsidies involving 5 sen to 10 sen would probably be regarded as small by most analysts who see an urgency for the Government to reduce its budget deficit. The fact is that the Government would have to fork out a staggering RM200bil to subsidise petrol and diesel over the next 20 years if we continue the present course.
We are one of the highest subsidised nations in the world, with fuel subsidies representing 5% to 44% of the nation’s fiscal deficit.
In short, a much quicker fix would have been preferred by the economists but the Government has to take into account the political balance and not burden the people. A gradual increase, as it is being done, has been chosen instead.
Even after these changes, the Government will still spend about RM7.82bil on fuel and sugar subsidies this year.
As for the cuts in fuel subsidy, Malaysians using small cars or motorbikes would not be affected too much and certainly it is fair that those with bigger, powerful and luxury imported cars have to fork out more for their vehicles.
The Government has also rightly not touched cooking oil and flour which are also subsidised, to ensure the middle and lower incomes are not affected.
Generally, Malaysians would support the initiatives to remove these huge bills to pay for our use of sugar and fuel. In the case of fuel, it has even benefited our neighbours with over 200 metric tonnes of sugar sold across the borders.
Fishermen have found it to be more lucrative to sell their subsidised fuel – one of the cheapest in the region – than catching fish.
But Malaysians also feel that this rationalisation exercise should be a shared responsibility. It does not matter whether you are a royalty, a minister, civil servant or a road sweeper, everyone must be seen to do their part.
It is a sin, even a treachery to the nation, if there is wastage and leakage because of our mismanagement, incompetency and corruption.
The people will not be convinced if we talk of putting up expensive buildings and structures if the Government wants to get the support of the people.
Let not our leaders, for one moment, think the people can be hoodwinked. They will catch every word and every action of our leaders to see whether they practise what they preach. The days of talking down to the people are over.
It is good to hear that Najib has dismissed the proposed new Parliament building in Putrajaya. In fact, no state should be putting up state assembly buildings when elected representatives only meet a few times a year.
The billions of ringgit removed from subsidising sugar and fuel, we are told, will be used for education and health care.
Other areas include security, development of skills and new energy technologies. Not to forget, scholarships for all SPM achievers with 9A+ or better, regardless of their race. This scholarship move is unprecedented.
fr:thestar.com.my/news/story.asp?file=/2010/7/16/nation/6677535&sec=nation
Cuts not expected to drive up inflation
KUALA LUMPUR: The rollback in subsidies is not expected to cause a major spike in inflation and the impact on overall consumption will be minimal but the Government should ensure that profiteering does not become rampant, according to analysts and economists.
More importantly, they said the Government should enforce stringent measures so that food prices were kept in check to protect the interest of the lower and middle-income earners.
CIMB Investment Bank Bhd economic research head Lee Heng Guie said the five sen or 2.8% rise in the price of RON95 would have a minimal impact on inflation.
“RON 95 has a 6.5% weightage to the overall consumer price index – and the 2.8% increase translates to a 0.2% overall impact to the index, so that’s minimal,” he said.
He said the increase in prices of petrol and other goods was a “good first small step” towards the Government’s subsidy rationalisation plan.
He expected Bank Negara to maintain the overnight policy rate – the benchmark lending rate – at 2.75% for the rest of the year.
AmResearch Sdn Bhd senior economist Manokaran Mottain said the increase in prices was expected and minimal.
“Consumers should not be complaining. The important thing now is for the Government to enforce stringent measures to ensure that food prices are kept in check,” he said.
MIMB Investment Bank research head Chan Ken Yew said the rise in prices appeared manageable although it meant that inflation would be creeping up.
He was targeting an inflation year-on-year growth rate of 3.1% this year.
“We need to see what sort of remedial acts the Government would implement during the Budget. For example, will it reduce income tax? Will there be other relief measures?” he said.
ECM Libra research head Bernard Ching said the current price increases were acceptable and would not result in much inflationary pressures.
“Five sen for RON 95 is manageable. Now that sugar price has been increased, we may also see some supply coming back, as there were initially some hoarding activities.” he said.
Ching added that the Government was mindful of consumer sentiment and the impact of subsidy rollbacks on the man on the street. He said the Government would most likely compensate consumers by announcing some form of relief measures soon.
fr:thestar.com.my/news/story.asp?file=/2010/7/16/nation/6678474&sec=nation
PM: Subsidy cut to ensure economic growth
By NIK NAIZI HUSIN
KUANTAN: The Government’s bold move in implementing the subsidy rationalising plan is part of a long-term measure to ensure the country’s economic growth and for the benefit of the people in the future.
Prime Minister Datuk Seri Najib Razak said that as a responsible Government, it had to make a decision to put the country’s economy on a strong track.
“If it is done on a short-term basis, the country’s future will be uncertain.
“The subsidy rationalisation plan will be implemented in line with the principle to minimise the people’s burden,” he said in his speech when launching the National Co-operatives Day celebrations here yesterday.
Najib said that in comparison to other countries in the region, fuel and sugar were still the cheapest in Malaysia.
“Malaysians are actually paying less for sugar at just RM1.90 per kg compared to those in neighbouring countries like Thailand, where sugar is priced at RM2.60 per kg, Indonesia at RM3.68 per kg and the Philippines at RM3.46 per kg.
“As for fuel, we are paying RM1.85 per litre for RON95, but in Thailand, it is RM4.12 per litre, in Indonesia RM2.48 per litre and in the Philippines at RM6.60 per litre,” he said.
He added that although the Government’s subsidies were mainly meant for lower income earners, only one-third of the country’s population fell within this group.
He said the subsidy cut for sugar would also help promote a healthier lifestyle because Malaysia were reported to have the highest number of diabetes cases in the world with 1.4 million patients.
“There have to be ways to overcome this situation and reducing sugar consumption is one of them,” he said.
Najib said 70% of those who used liquefied petroleum gas (LPG) for which subsidy was also cut, were involved in businesses while the rest were households.
“Statistics showed that the Government’s subsidies have not fully reached the actual target,” he said.
Najib also touched on the National Co-operative Policy, which would help engineer the country’s third engine of economic growth.
He said through the Malaysian Co-operatives Commission, the Government had allocated RM100mil as additional funds to assist co-operatives to conduct economic activities.
“Previously, the commission had allocated an initial fund under the Revolving Capital Fund amounting to RM387mil.
“Since then, it has accumulated to RM668mil and used as loans for the cooperatives to assist them in their business,” he said.
fr:thestar.com.my/news/story.asp?file=/2010/7/17/nation/6686150&sec=nation
Cut subsidies from the big boys, urges PAS
PETALING JAYA: The Government should look into reducing subsidies given to big businesses to ease its financial burden, said PAS secretary-general Datuk Mustafa Ali.
He said companies such as independent power producers could survive without subsidies but that the rakyat would suffer from an increase in food prices following the reduction in fuel subsidy.
Mustafa said although Malaysians understood the need to cut subsidies, which were a financial strain on the Government, it should look into other ways of reducing expenditure.
“The Government could look for other options. The rakyat’s needs should come first. Reducing subsidies for critical items such as fuel should be the last option as it will have a direct impact on consumers,” he said yesterday.
“The Government should first reduce the subsidies given to companies that make huge profits.”
Mustafa added that PAS was not planning to stage a protest against the subsidy cuts as previous demonstrations had failed to make any impact.
“Anyway, there are more pressing issues to look into, such as matters related to democracy,” he said.
fr:thestar.com.my/news/story.asp?file=/2010/7/17/nation/6683569&sec=nation
Learn to live with changing prices, says Fomca
PETALING JAYA: Malaysians must learn to live with changing prices of consumer products, said Federation of Malaysian Consumer Associations (Fomca) chief executive officer Datuk Paul Selvaraj.
“We have been living with low prices for so long that we have become too comfortable.
“In reality, the global consumer price index is on the rise. It is all too artificial,” said Selvaraj, who described the Government’s decision to cut subsidies for sugar and fuel as “a very courageous move”.
Emphasising the importance of consumer education, he said many Malaysians needed to have a better understanding on how the global market works.
“Some still think that the Government controls the prices when in fact it is determined by the market. The Government cannot manipulate the prices at all,” he said.
He urged the Government to improve public transport, especially now that fuel prices had increased.
Meanwhile, the Master Builders Association of Malaysia (MBAM) wants the Government to give a minimum six-month notice for future fuel price increases.
MBAM president Kwan Foh Kwai said this would allow all parties to budget and plan their expenditure and costs for a smooth transition.
In a statement yesterday, Kwan also appealed to all vendors and suppliers of building material and service providers not to take advantage of the situation by charging higher prices.
fr:thestar.com.my/news/story.asp?file=/2010/7/17/nation/6682315&sec=nation
RON 95 strictly for locals
KUANTAN: Vehicles with foreign registration plates can only buy RON 97 fuel starting from Aug 1.
Enforcement officers will be placed at petrol stations, particularly in the border areas in Kedah, Perlis, Johor, Kelantan and Sabah and Sarawak, to ensure petrol kiosk operators do not sell subsidised RON 95 fuel to foreign-registered vehicles.
Domestic Trade, Cooperative and Consumerism Minister Datuk Seri Ismail Sabri Yaakob said: “Foreigners can no longer fill up RON 95 petrol which is priced at RM1.85 per litre now. Its sale is strictly meant for Malaysian-registered vehicles only.
“They can only buy RON 97 petrol as the fuel will no longer be subsidised but subjected to a managed float.”
He said that despite increasing the price of RON 95 and RON 97 by five sen per litre, the Government still had to subsidise 45% of the total price of both types of fuel and also liquefied petroleum gas.
Ismail Sabri also said that the sugar price increase of 25 sen per kilo should not be an excuse for traders and retailers to increase prices, especially food and drinks.
“We can deploy officers to monitor prices of food and drinks, but restaurant and food stall owners must be responsible and honest enough not to increase prices.
“Furthermore, their business would not be affected much,” he told reporters after Prime Minister Datuk Seri Najib Tun Razak launched the National Cooperative Day at MPK 2 Field here yesterday.
“For example, with the new price of sugar, the cost of making a glass of teh tarik will go up by 1.2 sen. So, there is no reason why the teh tarik price will go up by between 10 and 20 sen,” he said.
Ismail Sabri said he would meet producers, wholesalers and retailers on Monday to get their commitment not to raise prices.
He said the ministry would mobilise about 1,600 price observers and 2,000 enforcement officers throughout the country in efforts to curtail indiscriminate price increases.
“Report to the ministry if traders raise prices,” he advised the public.
fr:thestar.com.my/news/story.asp?file=/2010/7/17/nation/6684155&sec=nation
Higher sugar price, lower diabetes rate
PUTRAJAYA: The sugar price increase may have been bitter for many people but the Health Ministry feels it has taken the right step to get Malaysians to watch their sugar intake.
“When people are careful with their sugar consumption, we will have fewer diabetic patients,” said minister Datuk Seri Liow Tiong Lai.
He said 14.9% of Malaysians were diabetic and this was high compared to just 8% of the population in 1996.
Even in China, only about 9% of its population suffered from diabetes, he told reporters after a meeting with his Chinese counterpart, Dr Chen Zhu, at his office here yesterday.
On Thursday, the Government announced a cut in subsidies for sugar, petrol, diesel and liquefied petroleum gas which resulted in an increase in the prices of these commodities.
Sugar, which was earlier sold at RM1.65 per kilo, is now RM1.90 per kilo on the shelves.
Meanwhile, the Consumers Association of Penang (CAP) has welcomed the move to reduce subsidies for fuel and sugar, saying it showed that the Government was moving in the right direction.
CAP president S.M. Mohamed Idris said fuel was a dwindling national resource while sugar was a substance which contributed to an unhealthy lifestyle.
Chief Minister Lim Guan Eng said the Federal Government should raise taxes imposed on corporate firms instead of increasing the prices of essential goods such as fuel and sugar.
fr:thestar.com.my/news/story.asp?file=/2010/7/17/nation/6683865&sec=nation
Minimal impact seen from subsidy cuts
By FINTAN NG
PETALING JAYA: The cuts in the subsidies for petrol, diesel, liquefied petroleum gas and diesel will see minimal impact to consumption patterns in the short term.
Analysts believe the less-than-aggressive cuts in the subsidies, which do not include cuts in the gas and cooking oil subsidies or an upward revision of toll rates, will not translate to any impact on business sectors most exposed to consumer demand.
“The impact on consumption will be small initially. I’m more worried about the cumulative effect and this will depend on how fast and how much further cuts will be implemented,” Jupiter Securities Sdn Bhd research head Pong Teng Siew said.
He said the impact, although minimal at this point, would be pervasive as all industries across the board would be affected due to higher tranport costs.
On whether there would be any more cuts in subsidies this year, HwangDBS Vickers Research Sdn Bhd research head Wong Ming Tek said this would be a “political call.”
He said despite the Performance Management and Delivery Unit’s recommendation for a six-monthly revision of the subsidies, it’s really up to the Government how or when to implement the cuts.
“We think this will result in higher inflation and dampen consumer sentiment but we don’t expect it to be significant at this point,” Wong told StarBizWeek.
Meanwhile, Maybank Investment Bank Bhd research head Andrew Lee said any further cuts would be “extremely gradual.”
“If the Government is to raise prices too fast, household consumption is going to be hit and that will be reflected in economic growth,” he added.
Lee said this would not be good as domestic demand constituted the main driver of growth over the next two years because of the slower pace of growth on the external front.
Analysts believed the cuts could fast-track the implementation of multi-billion ringgit public transport projects such as the RM36bil mass rail transit (MRT) system for the country’s capital.
In this respect, infrastructure firms Gamuda Bhd and MMC Corp Bhd, which have proposed plans for the MRT system, could be the beneficiaries.
Wong said in a report that the savings from the subsidy cuts could be channelled to the MRT project and expected some minor traffic disruption due to the increase in petrol and diesel prices but this would not affect PLUS Expressways Bhd, which had chalked up a 9.8% increase in traffic volume for its highways year-to-date in May.
fr:biz.thestar.com.my/news/story.asp?file=/2010/7/17/business/6681733&sec=business
Petrol dealers to lose licence if they sell RON95 to foreigners
By MAZWIN NIK ANIS
PUTRAJAYA: Petrol dealers risk losing their licence if they are found to be selling the subsidised RON95 to foreign-registered vehicles.
Enforcement will begin Aug 1.
Domestic Trade, Consumerism and Co-operatives Minister Datuk Seri Ismail Sabri said the onus was on petrol station operators to ensure this ruling was heeded, adding that foreigners had no right to enjoy subsidised fuel.
“This ruling is easy to implement. Petrol station operators need to ensure that foreign-registered vehicles use the pumps that have RON97.
“The government only wants Malaysians to enjoy subsidy. So, petrol dealers will have to be more vigilant and responsible in their business.
“If they fail to do so and are found to be selling RON95 to foreign registered vehicles, they risk having their licence revoked,” he told reporters after a dialogue with food and drinks manufacturers and restaurant operators on Monday.
Ismail Sabri had announced recently vehicles with foreign registration plates could only buy RON 97 fuel starting Aug 1 as RON 95 was still subsidised while the government was no longer subsidising the latter, which was now subjected to managed float.
On complaints by petrol dealers that the ruling was difficult to enforce, the minister said this was much easier than the policy of allowing foreign-registered cars to buy only 20 liters of petrol within 50km radium from border.
“We will have a dialogue with petrol dealers before this policy is enforced on Aug 1. We will also provide them with posters to inform foreign registered vehicle owners of this ruling,” he added.
Petrol dealers claim an effective mechanism to bar foreign registered vehicles from filling up with the subsidised RON 95 had yet to be found and that they did not know how the government planned to implement the decision.
fr:thestar.com.my/news/story.asp?file=/2010/7/19/nation/20100719155702&sec=nation
Petrol dealers want grace period to adjust
By TEH ENG HOCK
PETALING JAYA: Petrol dealers are asking for a month’s grace period to implement the ban on selling subsidised RON 95 petrol to foreign-registered vehicles as they and their customers need time to adjust to the change.
Petrol Dealers Association of Malaysia president Datuk Hashim Othman said the onus was on petrol stations to find a way to enforce the ban.
“At the beginning, I hope the Government will be a little lenient. You cannot be so strict. Give petrol stations an adjustment period of one month.
“Instead of a compound, maybe petrol stations can be given a warning letter (for selling RON 95 petrol to foreign-registered vehicles),” he said.
He said some customers might not be aware of the change in policy, and would need time to adjust.
“We will deploy people to guide them and also put up signages. It may be hard to monitor during peak hours, so we may have to put extra staff on the job.
“But this doesn’t mean our overheads will rise as we can deploy the station clerk or even the cleaner,” he said.
Hashim said the only snag was the use of credit cards at the pump, as once the transaction is approved, the customer could choose to lift either the RON 95 or RON 97 nozzle.
Following the first round of the recent subsidy rationalisation, Domestic Trade, Cooperative and Consumerism Minister Datuk Seri Ismail Sabri Yaakob announced that the sale of subsidised RON 95 petrol was strictly for Malaysian-registered vehicles.
He said foreigners could only buy the RON 97 petrol as the fuel was now subjected to a managed float. The ruling comes into effect on Aug 1.
Petrol stations who fail to adhere by the ruling would have their licences revoked, warned Ismail Sabri.
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Bus operators appeal for cheaper diesel during Hari Raya season
By ONG HAN SEAN
KUALA LUMPUR: Bus operators say they cannot afford to put more buses on the road during the Hari Raya period in September if they are not given subsidised fuel.
President of the Pan-Malaysian Bus Operators’ Association Datuk Mohd Ashfar Ali said additional express bus tickets for September had been put on hold pending a response from the Government.
“We are appealing to the Government for the price of diesel to remain at RM1.43 instead of RM1.48 for bus operators.
“If not, the subsidised fuel quota for express buses should be raised from 2,880 litres to 5,000 litres, and for stage buses from 1,440 litres to 3,000 litres,” said Mohd Ashfar.
He apologised to commuters for the inconvenience. “We are obliged by law to provide the service, but if we continue to incur losses, we have to pull the extra buses off the road,” he said.
Konsortium Transnasional Berhad (KTB) chairman Datuk Mohd Nadzmi Mohd Salleh said it faced a problem of providing extra transport for the festive season after the increase in the price of fuel.
“We are actually subsidising the cost by maintaining our current fares.
“With every five sen increase, we stand to lose RM3mil a year. If the Government continues to raise fuel prices by five sen every month, we will not be able to sustain our operational costs,” he told a press conference at the KTB headquarters here yesterday.
Mohd Nadzmi added that KTB suffered losses of RM12mil last year.
fr:thestar.com.my/news/story.asp?file=/2010/7/22/nation/6709374&sec=nation
Subsidy cuts without pay rise = tax hike
IT’S been roughly a week since subsidies were cut marginally in Malaysia and judging by the reaction people have to it, I guess the public has taken it in stride.
After all, the increase in the cost of fuel, which is ultimately the biggest cost element among the other goods that saw prices rise, was small and well within what people can stomach.
The price increases in sugar and cooking gas were small when looking at what an average household would spend monthly to consume and use such goods.
The way subsidies were removed this time around was also properly handled. The message of why that needed to be done was clear.
Conversely, editorials and comments have stressed the point that the increase in government revenue of RM750mil from the subsidy rationalisation, along with how the Government spends taxpayer money, should also be more disciplined to avoid wastage and should be on projects, goods and services that have tangible benefits to the general population.
So far so good but the reality of things is that the subsidy cuts announced represent the first wave of what could be a series of cuts that would bring down the overall subsidy bill of the Government.
It’s quite likely too that future subsidy cuts could see the price of fuel, depending on the price of fuel internationally, and electricity rise. Along with that, sugar, flour, cooking gas, cooking fuel and maybe even other goods, services and utilities could also see a price increase.
And while the general population, especially the middle-class, has been quiet about the first cuts, there could be grumbles if the price increases do not correspond with the pay packet they bring home.
The reason for that is there is a feeling that urban inflation has grown quite a bit in recent years and that wages in Malaysia have not increased in keeping with the rise in the prices of consumables or even assets.
The increase in starting salaries for jobs in many industries today pales in comparison with how, say the price of a house, car or processed food has risen over the past years or even decades.
I know employers will say that salaries would have to reflect the productivity of employees, the growth of which has in recent years been poorer compared with how Malaysians in yesteryears used to attain.
There are also suggestions that the current labour laws, which make it difficult for employers to fire unproductive employees, are also an impediment to employers offering more lucrative salaries for their workers.
Changes to such laws are reportedly being looked at but there is still no guarantee wages would rise after that.
Unless salaries rise as a result of a more efficient marketplace brought about by the removal of subsidies and laws, the price hikes from future subsidy cuts would be viewed as a tax hike. And that could well raise the blood pressure of a lot of people.
·Deputy news editor Jagdev Singh Sidhu is now looking at a substantially smaller pay packet for the next few months, not from the subsidy cuts but the taxman.
fr:biz.thestar.com.my/news/story.asp?file=/2010/7/22/business/6710844&sec=business
Petrol dealers: Pay us a percentage
By TEH ENG HOCK
KUALA LUMPUR: Petrol dealers want their sales commission to be converted to a pre-determined percentage instead of the current quantum of 12.19 sen per litre of petrol and seven sen for diesel.
Petrol Dealers Association Malaysia (PDAM) president Datuk Hashim Othman said that having the percentage system would offset the effects of future price hikes.
Under the current fuel price, that would work out to 6.59% for petrol and 4% for diesel.
Hashim said the last time their sale commission was raised was in early 2008.
“If it is converted to a system based on percentage, we do not have to keep going back to the Government to ask them to review the commission every time the fuel price goes up,” he added.
Deputy president Datuk Zulkilfi Mokti said the commission should be part of the automated pricing mechanism used by the Government to determine the price of fuel.
“We should be automated too as we are also stakeholders. You cannot just be fair to oil companies; you must also be fair to petrol dealers,” he said.
The association is also pushing for consumers who use credit cards to pay for the service. Petrol stations have to pay between 0.7% and 1% to the banks for transactions made using credit cards, said Hashim.
He said the profit margin of petrol stations had dipped, with some barely making money due to higher costs incurred in running the stations, higher utility bills and workers’ salaries, as well as the higher cost of living incurred by the dealers themselves.
“At the end of the day, the consumer should pay (for the convenience), or the bank, or oil companies as part of their marketing cost. Why pass the buck to dealers?” said Hashim, who is also calling on oil companies to do away with the requirement for bank guarantees.
He said dealers had to provide bank guarantees ranging from RM40,000 to RM250,000 and also make sure they had enough in their debit account.
“There should be zero bank guarantee when direct payment is already made,” Zulkifli said.
fr:thestar.com.my/news/story.asp?file=/2010/7/24/nation/6727353&sec=nation
Malaysians with foreign-registered cars need to show MyKad to purchase RON 95
KOTA KINABALU: Effective Sunday, Malaysian citizens driving foreign-registered cars will be required to show their identity card (MyKad) before they are allowed to purchase the RON95 petrol.
This follows the ruling which came into effect whereby only Malaysian citizens are allowed to purchase the RON95 petrol, while foreigners can only purchase the RON97.
Domestic Trade, Cooperatives and Consumerism Minister Datuk Seri Ismail Sabri Yaakob, who announced the new ruling on July 16, said the Government realised that many Malaysians working in Singapore owned Singapore-registered cars and travelled frequently to Johor Baru.
“So, they just have to show their identity card at petrol stations because we want to make sure that RON95 petrol is sold only to Malaysians,” he told reporters after opening the Sabah Coop Fest 2010 here Sunday.
He said the ministry would also deploy its enforcement officers to several petrol stations at borders to ensure that the new ruling was being adhered to.
Meanwhile, in Johor Baru, Bernama found that motorists from Singapore had no problems in getting their fuel supply as most of them had been using RON97 instead of RON95.
Noorini Adam, 35, from Singapore, said she had no problem adhering to the new ruling as the fuel sold here was still cheaper than those in Singapore.
“It’s alright; as long as we are allowed to purchase the fuel here,” said the housewife who enters Malaysia fortnightly.
A supervisor at a petrol station near the Customs, Immigration and Quarantine Complex here, Mahrop Md Salleh, 21, said they had no problem in implementing the new ruling although the number of foreign vehicles refuelling at the station could reach hundreds daily.
“We will inform them about the new ruling. The station also has additional RON97 pumps for the convenience of the customers,” he said.
In Bukit Kayu Hitam, a petrol station manager, Low Ewa Chye, said that most of his foreign customers did not mind when told that they could only purchase the RON97 petrol.
“Between 30 and 40 foreigners get their vehicles refuelled here daily, including from Thailand and Singapore,” he said.
A pump attendant, Siti Haida Mat, said some of the foreigners cancelled their intention to refuel when told about the new ruling.
“Then they tried to fill up at other petrol stations thinking that the ruling did not apply there. Some even asked how long the ruling would last, but most of them didn’t mind and just purchase the RON97,” she said.
In Rantau Panjang, Bernama checks found that several petrol stations were quieter than usual as it is learnt many foreigners had their cars refuelled before the ruling took effect.
fr:thestar.com.my/news/story.asp?file=/2010/8/1/nation/20100801184430&sec=nation
Petrol attendants kept on their toes to uphold new ruling
By DESIREE TRESA GASPER and EMBUN MAJID
JOHOR BARU: The ruling barring foreign-registered vehicles from buying RON 95 petrol from Aug 1 kept petrol kiosk attendants in Johor and Kedah on their feet, having to check each car before allowing customers to fill up.
“It is very hard for us to monitor each vehicle that comes into our station; it will get worse during peak hours,” said Chai Siaw Shin, 30, who works at a station in Jalan Tebrau here.
She said the ministry had sent a letter on the ruling but had left it to petrol station operators to implement the rule.
Another attendant, who only wanted to be known as Zamri, said he had been roundly scolded by Malaysians drivers who came in vehicles with Singapore registration.
He said the complaints were pouring in despite a rise of only five sen per litre in fuel prices following the reduction in the petrol subsidy.
Singaporeans S. Bala, 60, and Suhaimi Noor, 40, were not bothered by the price increase; they will continue to fuel up on RON 97 in Malaysia as long as the price does not increase further.
Checks at several other petrol kiosks, however, showed some drivers of foreign registered-vehicles were still blatantly fuelling up with RON 95 despite signs clearly stating that it was prohibited.
In Alor Setar, many Thai motorists drove from one petrol station to another hoping to buy RON 95.
A Thai national who only wished to be known as Ben, 45, said he drove to a station in Changloon to buy RON 95 but was told that he was not allowed to do so.
Ben, who lives in Haadyai, said he only learnt about the ruling yesterday.
Suda Aa, 58, a Thai Customs officer based in Danok, who usually fills petrol once a week at a station some 3km from Bukit Kayu Hitam, bemoaned that she was only allowed to buy RON 97 yesterday.
Lim Ewa Chye, 54, who operates at a petrol station in Bukit Kayu Hitam, said he had put up notices at the pumps since Friday to inform foreign motorists of the ruling.
In Kota Kinabalu, Minister Datuk Seri Ismail Sabri Yaakob said Malaysians driving foreign-registered cars could purchase RON 95 petrol if they showed their MyKad.
The price of RON 95 is RM1.85 per litre in Malaysia compared to RM4.12 in Thailand, RM2.48 in Indonesia, RM6.60 in the Philippines and RM4.30 in Singapore.
fr:thestar.com.my/news/story.asp?file=/2010/8/2/nation/6779146&sec=nation
Foreigners warned over RON95 fuel ruling
JOHOR BARU: Foreigners who blatantly flout the ruling that bars foreign-registered vehicles from buying subsidised RON95 petrol can be fined up to RM100,000 or face three years imprisonment.
Deputy Domestic Trade and Consumer Affairs Minister Datuk Tan Lian Hoe said the ministry would not hesitate to penalise foreigners under the Control Supply Act 1991.
“We hope the foreigners can cooperate with the ministry and abide by the ruling,” she told The Star yesterday.
Tan urged the foreigners, especially in border states such as Kedah, Perlis, Johor, Kelantan and Sabah and Sarawak, to follow the ruling and respect the country’s laws.
“The price of RON97 is still much cheaper compared to countries such as Singapore,” she said.
She added that ministry personnel nationwide had been instructed to monitor petrol kiosks to ensure that foreigners and kiosk operators abide by the ruling.
She added that operators also risked losing their licence if they were found to be selling the subsidised RON95 to foreign-registered vehicles.
fr:thestar.com.my/news/story.asp?file=/2010/8/3/nation/6785768&sec=nation
Singapore-based Malaysians can fill up by showing MyKad
JOHOR BARU: Malaysians who drive foreign-registered vehicles can fill up with the RON95 subsidised petrol provided they show their MyKad at the kiosk.
The Government, said Deputy Domestic Trade, Cooperatives and Consumerism Minister Datuk Tan Lian Hoe, was aware that many Malaysians who work abroad also own foreign-registered vehicles.
“This is common in Johor, where those who work across the causeway own Singapore-registered vehicles,” she said yesterday.
Tan, however, warned them not to abuse the privilege by buying the cheaper fuel for their Singaporean friends or acquaintances.
“The ministry’s personnel will monitor petrol stations to prevent such abuse,” she said.
The ruling barring foreign-registered vehicles from buying RON95 petrol took effect on Aug 1, causing much headache for kiosk workers who had to attend to each car to screen if they are locally-registered.
The RON95 price of RM1.85 per litre in Malaysia is cheaper than in Singapore (RM4.30), Thailand (RM4.12), Indonesia (RM2.48) and the Philippines (RM6.60).
Meanwhile, the ministry’s Johor office said it would monitor the situation in the state.
State director Che Halim Abd Rahman said: “We want foreigners as well as petrol kiosk operators to know that our personnel are monitoring them.”
On the possibility of abuse by Malaysians filling up RON95 for foreigners, Che Halim said: “If it happens, we will instruct petrol kiosk operators to ask for the MyKad as well as the vehicle’s registration papers.”
fr:thestar.com.my/news/story.asp?file=/2010/8/4/nation/6793310&sec=nation
Foreign car users can report if kiosks don’t sell RON95
By DESIREE TRESA GASPER
JOHOR BARU: Malaysians using foreign registered-vehicles should report to the relevant authorities if they are refused by petrol kiosk owners to purchase RON 95 petrol even after producing their MyKad.
Johor Domestic Trade and Consumer Affairs department director Che Halim Abdul Rahman said a directive had been circulated to all petrol kiosk owners and it should not be disregarded as a “mere rumour.”
“We hope that all petrol station owners strictly adhere to the new ruling and not impose restrictions of their own,” he said.
He added that any consumer facing problems purchasing fuel even after producing their MyKad at kiosks should immediately contact the department who would then take further action.
“We have a team of personnel specially responsible for observing and ensuring that the new ruling is implemented,” he said, adding that consumers should do their part and report to the department if they are not allowed to fuel up.
He, however, added that if petrol kiosk owners were still finding it hard to verify if a consumer was local or not, consumers might have to produce their vehicle’s registration papers and MyKad before being allowed to purchase fuel.
Che Halim urged anyone with queries pertaining to the new ruling to contact the department at 07-2272828.
The Domestic Trade and Consumer Affairs ministry prohibited foreign registered vehicles from filling up with the RON95 subsidised petrol from Aug 1.
The ministry amended the ruling to allow Malaysians driving foreign-registered vehicles to fuel up provided they produced their MyKad at the kiosk first.
fr:thestar.com.my/news/story.asp?file=/2010/8/5/nation/6797514&sec=nation
Foreigners may use ‘jockeys’ to fill up tanks
READING the news report that Malaysian drivers with foreign-registered vehicles can just show their MyKads to kiosk personnel in order to buy RON95 petrol and that foreign car users can report if kiosk owners don’t sell RON95 to them brings to mind again another issue that has not been properly thought out or planned before execution.
Knowing that Malaysians are quite “innovative” when it comes to making a quick buck, I think the flexibility of just showing the MyKad has the undesired effect of creating “jockeys” who are Malaysians, waiting at petrol kiosks near our borders to assist foreign vehicle owners fill up with the cheaper RON95.
With a price differential of 20 sen per litre, filling up a 100-litre tank for example, can be quite “profitable” for both parties.
Have the authorities thought of a way to counter this potential connivance or to monitor the potential controversy that this rule may create?
TAM YENG SIANG,
Petaling Jaya.
fr:thestar.com.my/news/story.asp?file=/2010/8/6/focus/6810018&sec=focus
Petrol kiosks still unsure of fuel ruling
By FARIK ZOLKEPLI
JOHOR BARU: A week after the ruling barring foreign-registered vehicles from buying the subsidised RON95 petrol was implemented, most petrol kiosk operators are still unsure whether Malaysians with such vehicles are permitted to buy the grade of petrol.
Johor Domestic Trade and Consumer Affairs Department director Che Halim Abdul Rahman said most operators here were doubtful whether Malaysians were purchasing RON95 for their own vehicles or for foreign friends.
“I urge operators to abide by the ruling and allow Malaysians with such vehicles to buy the particular grade of petrol.
“Our officers are monitoring the situation and so far there have been no cases of Malaysians flouting the ruling by buying for their foreign friends, especially Singaporeans,” he told The Star yesterday.
Che Halim reminded petrol kiosk operators that those with Malaysian permanent resident status were not eligible to buy RON95.
Department officers also reported that foreigners had abided by the ruling during the first week, he added.
Che Halim warned Malaysians not to attempt to fool the operators by fuelling up for their Singaporean friends as they would face the consequences.
“If such cheating cases are detected, we will be forced to make it compulsory for them to show their vehicle grants to prove the vehicle is actually theirs.
“We hope it will not come to that but the department will not hesitate to enforce such regulations if there are cheating cases,” he said.
He added that the department would meet petrol kiosk operators soon to gather more feedback.
Che Halim urged anyone with enquiries pertaining to the new ruling to contact the department at 07-2272828.
The Domestic Trade and Consumer Affairs Ministry prohibited foreign-registered vehicles from filling up with RON95 from Aug 1.
The ministry amended the ruling to allow Malaysians driving foreign-registered vehicles to fuel up provided they produced their MyKad.
fr:thestar.com.my/news/story.asp?file=/2010/8/10/nation/6824399&sec=nation
Oil price not controlled by companies
PETALING JAYA: Oil companies in Malaysia have no control over price fluctuations of petrol and diesel nor have they the power to determine the pump price for both fuels, said Chevron Malaysia Limited.
The company, which operates the retail brand Caltex, in a statement here yesterday said all oil companies currently operate at a fixed margin determined by the Government’s automatic pricing mechanism.
“Under the current managed float for RON97, the Finance Ministry determines the pump price of RON97 and notifies the oil companies of the applicable price on a monthly basis, reflective of fluctuations of the oil prices in the international market,” it said.
The statement was in response to Domestic Trade, Cooperatives and Consumerism Minister Datuk Seri Ismail Sabri Yaakob’s remark that market forces controlled the price of RON97 and not the Government.
fr:thestar.com.my/news/story.asp?file=/2010/11/9/nation/7390767&sec=nation