With the continous record breaking rise of crude oil price, our price hike seems inevitable. It’s a logical decision for the government to cut the subsidy… the only question that always puzzle me is how they are going to spend the extra money saved from the reduced subsidy.

So far I haven’t heard anything to improve our public transportation system, or to find alternative ways to reduce petrol consumptions in the country… nobody really knows where the money saved from the previous price hike had been used.

The government is supposed to announce some measurements along with the price hike today… will have to read the papers later tonight to see what is happening.

On the other hand, 78 cents hike should be a shocker for most Malaysians… it’s by far the biggest margin we have ever had. The extra fuel cost doesn’t concern me much; what worries me is if the government could control the side effect of the fuel hike… as other products and services would be calling for price hike as well.

Update – shoot, electricity rates going up as well, 18% for homes and 26% for business users from July onwards. This increment could cause more damage than the fuel hike actually; we can try to save on fuel… but we don’t have much option with electricity.

The government also announced a new rebate system for vehicles of different classes as well as a reduction on road tax [details at Bernama and Thestar] which actually opens more rooms for debates of unfairness…

Since that I am working from home, I need to drive less often… but hey, I am getting the same rebate for my car like other car owners. Also, I have a motorbike at home that I rarely used, but heck… I am going to get RM150 rebate regardless; how odd is that?

The rebate is probably aimed to curb the foreign vehicles issue, but the government could be overlooking it by creating more confusions and controversies domestically.

[Official media statement from the PMO about the subsidy restructuring]

Update June 11 – The government has announced that the prices of petrol and diesel will not be raised any more in 2008 even if the global oil price reaches US$200 a barrel. [Bernama]

Update – the plan has been postphoned. The northern border will start the ban on June 2 while southern border on June 9.

Update June 5 – the ban has been lifted following the new petrol scheme.

Domestic Trade and Consumer Affairs Minister Datuk Shahrir Samad said the move is aimed at plugging loopholes in the current subsidy system; but the move is temporary until the ministry could come up with better management of the subsidy system.

The ban will involve between 200 and 300 petrol stations, and extends up to 50 kilometres from the borders in Kedah, Kelantan, Perlis, Perak and Johor. Currently, petrol stations are not allowed to sell more then 20 litres of petrol to foreign vehicles.

A Singaporean friend was telling me that Malaysia is coming out with this rule to revenge the lost of Batu Puteh. It was just a joke, but it makes me wonder if there are any Singaporeans who actually thought about that and took it seriously.

The decision is set to raise some controversies. While it might help curbing the issue directly, it would lead to other matters like tourism and foreign relations. It’s easy to count the amount of subsidy saved from the new rule, but the intangible losses might be larger than what we would gain.

Actually, the logical way to coup with the issue is to reduce our petrol subsidy and increase our fuel price. The subsidies money could be better spent to improve our infrastructures and public transports, which in long term is the only way to reduce the mass consumption of petrol in our country.

The problem is whether the extra money saved from reducing the subsidy would be well spent and not wasted… we have seen too much mismanagement of public funds over the years that we have generally lost faith with our government obviously.

The snowball effect on other consumer goods will also be a concern, but it could be controlled with proper monitoring and management.

Reducing the subsidy is the only way to go… Malaysians have been pampered all these years; it’s time to have some reality check. Besides, the rich people are the ones that benefited most from the fuel subsidies anyway… it is not helping as much for the poor.

Malaysia is not facing bankruptcy danger even if we keep the price level… what Deputy Prime Minister Najib Abdul Razak claimed prior to the New Year Day was obviously to demean the opposition parties instead of solid economic facts. Najib said that the opposition’s promises to reduce oil prices if it were to form a government will only bankrupt the country, because it’s not possible…

It doesn’t take a genius to realise that the government controlled Petronas would be making extra money following the rising oil price as well… the government is probably not losing too much with the subsidies compared to a few years ago (if there is any loses at all).

Khairy Jamaluddin was right though when he said on Umno’s General Assembly in Nov 2007 that the petrol subsidy could be better spent on other developments. My point of view is still the same… that it would be a wise move to cut the petrol subsidy ONLY IF the money are spent at the right place (education, health care etc.) and not going to dubious projects like Angkasawan or buying a new submarine… or perhaps the worst – to waste and corruption.

Considering that Malaysia won’t be having much petroleum resources left (probably finished in a decade or two without new findings)… our government need to be proactive in finding new energy resources (bio-diesel, solar power etc.) and reducing petroleum consumption. We need a better public transport system to start with; it’s a pain to travel in Malaysia without a car.

At the meantime, we the common citizens just have to be prepared for the next price hike.

It’s reported that the deceased driver had 13 summonses and 2 arrest warrants in his name for various traffic offences. It’s easy to blame on the driver for the accident, but fact is multiple parties should be held responsible for the crash… the bus company, PUSPAKOM, JPJ, police, Ministry of Transport and Ministry of Human Resources etc.

Horrific bus accidents tend to happen in Malaysia every one or two years. Each time it happened, the government will jump out promising all countermeasures to prevent it from happening again… but it is still happening again and again and again. All those countermeasures were only empty talks, nothing much was actually done.

Don’t count on any improvements after this… chances are most people will forget about the accident a few days later; the government leaders will be among these peeps.