Thursday, June 05, 2008

Protesters Target Malaysian Fuel Price Hike

Malaysia's government faced demonstrations and public outrage Thursday over its decision to hike petrol prices 40 percent overnight, in a bid to curb its massive subsidies bill.

Opposition groups said they would hold protests in Kuala Lumpur at 11.30am (0330 GMT) and in the northern city of Ipoh at 11.00am over the "unconscionable" increase.

"The fuel increase is both economically inefficient and socially unjust," said Lim Guan Eng, secretary-general of the Democratic Action Party which is part of the opposition alliance.

"So long as rich companies continue to enjoy such fuel subsidies, especially the independent power producers, the fuel increase will be seen as both pro-rich and punishing the poor," he said in a statement.

The new pump price for petrol will be 2.70 ringgit (0.84 dollars) and 2.58 ringgit for diesel. Petrol previously cost 1.92 ringgit, among the cheapest in Asia.

Prime Minister Abdullah Ahmad Badawi's announcement on Wednesday evening triggered chaos across the country as motorists swamped fuel stations to fill up before the measure took effect at midnight.

Traffic snarls brought streets to a standstill in the capital Kuala Lumpur as up to 100 cars queued at each petrol station which still had fuel to sell, while many others said they had sold out and turned angry customers away.

Abdullah indicated that further increases were in the pipeline as Malaysia moves to completely abandon fuel price controls that would have cost 17.4 billion dollars this year -- about a third of the national budget.

"God willing I hope Malaysians will not demonstrate over this," he said, referring to fury over earlier hikes in a country where public transport is poor and most people are reliant on their cars.

Motorists who turned up at petrol stations Thursday to pay sharply higher prices to fill their tanks were uniformly furious over the decision.

"We can do nothing about this government increase -- we have to buy fuel, otherwise how can we go to work?" said 56-year-old engineer K. Letchumanan. "For my family it's not so bad as we have two incomes, but the poor people will suffer."

Aminah Rahmat, a 46-year-old streetside vendor who had set up her food stall outside a petrol station, said she could already barely manage on her monthly income of less than 1,000 ringgit (300 dollars). "The government does not care for our welfare, that is why they have made such a huge fuel increase," she said. "How can I afford to pay so much to transport my cooked food to my customers? I will go out of business."

Bus operators said that a third of companies may have to close down and lorry firm said their rates would have to rise, in a move that will trickle down to higher prices for goods and services.

Abdullah is taking a major political risk in removing price controls as he attempts to recover from disastrous March elections that dealt the ruling coalition its worst results in half a century. Rising prices of food and fuel were a major factor in the ballot, which has triggered repeated calls for the premier to stand down.

"It is not an attempt to be popular, we have to think in the best interests of the people," Abdullah said Wednesday.

Under a revamped subsidy system, drivers of smaller vehicles will receive a cash payment of 625 ringgit to offset the rising cost, equating to subsidising some 800 litres of fuel.

But economists said the subsidy cut was deeper than anticipated, and that the cash payment was not large enough to compensate for average use.

Abdullah said the price hike could suppress economic growth and drive up inflation as high as 5.0 percent this year, from current levels of 3.0 percent in April.

As part of the subsidy reform, industry and power producers will be charged higher prices for gas from July. Electricity tariffs will rise 18 percent for householders, and 26 percent for commercial and industrial users.

But there was good news for Thais and Singaporeans who will now be allowed to buy fuel at border petrol stations after a recent ban was lifted in view of the subsidy cut.

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Anonymous Anonymous said...

All Malaysians must share the blame for not objecting when a dismay failure in Introductory Economics proclaimed himself as Finance Minister in 2003. A garbage collector will perform much better as Finance Minister compared to that miserable specimen of an ape

11:35 AM GMT+8  
Anonymous Anonymous said...

Petrol naik…

Adui… complain complain complain lol

Bangsar become cycling spot!

2:25 PM GMT+8  
Anonymous Anonymous said...

in the interest of the people? which people? the fat cats in UMNO and his sycophants?
how much leakage for the fat cats engaged in the 2nd Penang Bridge. What, no leakages when contract value goes up by whopping 77% in less than a year to RM4.8 billion and is substantially higher than the bridge in Shanghai which by international standards require more ingenious engineering skills. What about Port Klang Fleece Trade Zone, a scandalous RM4.7 billion white elephant to feed the fat cats? Ling, Chan, Chor, Tiong, the lapdogs for UMNO treasurer, what say you all?
I dont believe in cross overs for PR to govern but it now looks like to me, frogs are welcome! Anything but BN.

2:32 PM GMT+8  
Anonymous Anonymous said...

The pain of this Petrol hike would not have been so bad if not for:-

1/ Petronas wasting money on their Orchastera (Millions a month spent) & on bailing out worthless Government-linked Companies
2/ Bad Public Transport System
3/ Millions (actually Billions) spent on wasteful Projects that only help "feed" the UMNOputra Cronies
4/ Billions spent on buying Submarines (what do we want with Sumarines?). Basically it was to send our first Malaysian Tourist (Mr. Angkasawan Negara) to space to do some worthless experiments
5/ Probable use of more Millions to send our second Tourist to space!
6/ What happens to Petronas profits? Where are they going? Aren't we an Oil Exporter?
7/ With this Price Hike, you can bet everything else is going to go up (food, transport, electricity, etc, etc). BN (Barang Naik) is a good name alright!
8/ Outright Government/Police/Judiciary corruption
The list goes on & the end the man on the road suffers!

2:52 PM GMT+8  
Anonymous darcwil said...

Dear blog owner, as a "law abiding citizen", do you feel demos and street protests are the right way to go about this issue? Because I feel it is unnecessary, more so people could go out of hand and even more worst things could happen to the ever fragile state of our beloved country.

12:14 PM GMT+8  
Anonymous Anonymous said...

The price of fuel has not risen half as much as the fuel prices in Europe especially stop whingeing and moaning and try get a life !!

3:39 AM GMT+8  
Anonymous Anonymous said...

One of the mention in UK the fule is much higher-Pls use yr brains we r Malaysians-don't compare with other countries--I am fm UK-the price of fuel over here is cheap for me--but look at the the man on the street this r the people will face hardshsip

11:11 AM GMT+8  
Anonymous Anonymous said...

I fully agree with this comment--What did contribute to the country--Nothing--that money can be use for better life for the hardocre poor man on the street!----

it was to send our first Malaysian Tourist (Mr. Angkasawan Negara) to space to do some worthless experiments

11:15 AM GMT+8  

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