JUNE 13 ― While over 200,000 people died on December 26, 2004 when the tsunami destroyed swathes of Asia, many of the 37 who died on Penang’s Miami Beach left a lesson for us to use today.
A man is seen refuelling his vehicle at a petrol station in Khantan, Perak June 10, 2024. ― Picture by Farhan NajibInexperience envelopes the current stratagem to end fuel subsidies in Malaysia, beginning with diesel on June 10, 2024. The prized RON95 petrol may go up more or sooner depending on how well the current diesel implementation is received.
Regardless of debates about Malaysia as a net importer or exporter of oil, as it would be marginal either way the critical point is that it is monumentally different from the highs of the Nineties and Noughties. As mentioned before, the diesel manoeuvre is a precursor for the more colossal petroleum RON95 price rise, where the serious pitfalls lie. As it would affect considerably more millions of the population and the multiplier effects even more pronounced.Malaysia has the lowest fuel prices in Asean. Our cheapness is why our land borders are rife with smuggling.The question is misleading. Humans like things cheaper, not just Malaysians.
Rounding up the parameters, the universal uncomfortable truth that most subsidies lead to — look at ration cards in India and wheat imports in Egypt — corruption and smuggling because by definition they distort natural price determinations, there are incentives to be bad, very bad.Poorer Asean countries stomached fuel subsidy reductions and survived. Thailand and Indonesia have heavily reduced their subsidies and The Philippines did it more than 25 years ago.