Let's talk about something that's more up-to-date today, like the hike in fuel price that will come into effect tomorrow, well, in less than 3 hours time to be more precise. Based solely on personal opinion and perhaps a little imagination, let's have a look on the aftermath of the 40% price hike, from a mere RM1.92 to RM2.70 (brace yourselves, there's more to come in August), the highest increase in many, many years with some believing its sort of like a "punishment" to the rakyat lols.
Meet Jed. Jed, like most salaryman, earns just enough to survive each month working as a software developer in Kuala Lumpur. Due to the limited and inconsistent public transportation around the area he lives in, Jed drives to and fro his office, located in the heart of the city or somewhere nearby every single working day. On average, he needs to refuel once a week and each session would cost him roughly RM60 for about 31 liters of petrol.
However, with the recent increase, Jed will have to fork out an additional 78 cents per liter, thus, forcing him to pay around RM84 now, and Jed is just driving a MyVi 1.3 auto. That's about RM336 per month, just for fuel. So, the question is, what would Jed do to ease this additional burden since taking public transportation to work is still not a viable solution?
The first thing that comes to mind would be to further minimize his already tight budget, anywhere possible, like cutting down on movies and shopping, opting for cheaper food when dining out, less yum cha sessions, so on and so forth. Other than that, Jed would also consider taking public transportations whenever possible and restrain from driving to far away places unnecessarily which probably translates to even less road trips. All in all, Jed plans to spend less and save more.
From the above, the hike had consequently reduced Jed's purchasing power dramatically and since its not just Jed that's being affected, coupled with the recent increase in food prices, its pretty obvious that many would follow suit in budgeting effectively. Now, with the huge volume of downshift in consumer's spending power, who's gonna be contributing to our gross domestic product (GDP) growth since everyone's saving? And what about the local tourism industry? Or the property and automotive industry?
Not only that, the hike would definitely have a ripple effect on prices of all other commodities, since a high percentage of economic activities requires consumption of fuel, be it directly or indirectly, in the form of goods transportation. This means you'll be paying more for everything sooner or later, be it a plate of chicken rice, a tin of Milo or a trip to the local physician. And with this, we might just see an increase in crime rate since even basic needs would be less affordable or perhaps I might just have gone a little too far saying this but we shall see.
And you know how the government keep reiterating that our fuel prices is still much cheaper compared to neighbouring countries, which by the way are not oil exporting countries? Moreover, average salaries are considerably low as well and this translates to a higher cost of living. I can honestly say if you're not planning for any properties or automobiles, you can easily survive in Singapore earning SGD2000 but not in KL earning RM2000, which sucks, big time.
In actual fact, I am all for the government's decision to eventually have the fuel prices pegged according to the market value. The subsidies can then be put into better use, like improvement of public transportation and infrastructures, further development on food, education and technology programmes, helping out the poor and needy communities and all that. But the recent hike is just too high and too soon, the government has effectively increased the burden of the rakyat still in the midst of coping with rising food prices. The RM625 rebate, equivalent to RM54 per month, is not even enough for a single refuel. And with the "government's call" for its people to Ubah Gaya Hidup (Change Your Lifestyle), I am wondering what else can we ubah, eating less ah?
And there you have it, the thoughts and opinions of an individual who has not much knowledge in the field of economics. I wonder what would be coming from the experts in this field or would it better for me not knowing?
p/s: I just got to know that the government has also approved the electricity tariff hike as well. Malaysia Boleh!
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