Two price structures for petrol from May 1

Petrol, diesel, LNG, LPG, NGV, fuel consumption, petrol & diesel price, petrol & diesel subsidy, rebate and etc etc

Two price structures for petrol from May 1

Postby admin » Thu Jan 07, 2010 11:26 am

PETALING JAYA: There will be two price structures for petrol from May 1 -- one for Malaysians and another for foreigners -- Domestic Trade and Consumer Affairs Minister Datuk Seri Ismail Sabri Yaakob said on Thursday.

For Malaysians, the price of petrol will also be based on engine capacity, which means that not all would be entitled to subsidised fuel, he added.

Different petrol prices would be introduced for different groups of Malaysians, Ismail told a press conference here on Thursday after launching the new corporate identity of the F&N Soft Drinks Division.

Amongst the things that would be considered are the engine capacity of vehicles and socio-economic factors, he said.

He said that the subsidy for petrol would be retained but only targeted groups would receive the subsidy.

“The categories will then be divided into sub-categories such as the engine capacity of the vehicles used and other factors such as socio-economy,” he said.

“For RON95 petrol, the Goverment’s subsidy is 30sen per litre now. The current price of RON95 petrol is RM1.80 compared to the actual price, which is RM2.10.

“So, Malaysians who are not eligible for the subsidy and also non-citizens will have to pay RM2.10 or more,” he added.

Besides introducing the new structure, the ministry also plans to make the usage of My-Kad compulsory when buying petrol to identify one’s nationality.

“We have Thai nationals who drive into Malaysia to fill up their tank as they don’t receive any subsidy, which makes petrol such an expensive commodity there,” he said.

Further information on the new structure would be announced on May 1, 2010.

Umno deputy youth chief Khairy Jamaluddin, who first broached the subject in 2007 when debating the economic resolution before the last general election, had said that the subsidy must reach only the people who most needed it.

The current method was tantamount to a misallocation of funds, he had said.

Meanwhile, the subsidies on flour, sugar and gas would be retained, announced Ismail.

“Although the price for sugar has increased by 20sen, the Government is still footing the 80sen subsidy on sugar,” he said.

Ismail later conducted spot checks on several stores and eateries in the area to check on whether they had increased the price of food items after the increase in sugar price.

He said that the 20sen increase in sugar price should not be taken advantage of by food outlet operators.

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Fuel price by car size

Postby admin » Fri Jan 08, 2010 1:21 am

PETALING JAYA: The bigger your car, the more you will have to pay for petrol from May 1.

This is because the Government is going to change the way fuel is subsidised.

It is planning for a fuel pricing mechanism that will ensure only targeted groups, particularly those from the lower-income, will receive fuel subsidy.

Also, foreigners who drive into the country to fill up their tanks will not be eligible for subsidy and will have to pay more for fuel.

“The bigger the engine, the higher petrol will cost,” Domestic Trade, Cooperatives and Consumerism Minister Datuk Seri Ismail Sabri Yaakob said yesterday.

The move was based on the assumption that those in the lower income group would normally drive a car with a lower engine capacity and thus be eligible for the subsidy, he said.

“For RON95 petrol, the subsidy is 30 sen per litre. The current price of RON95 petrol is RM1.80 compared with the actual price of RM2.10.

“Malaysians who are not eligible are those who drive a higher engine capacity car or non-Malaysians. They will have to pay RM2.10 or more for RON95,” he told a press conference after launching the new corporate identity of the F&N soft drinks division here yesterday.

Besides introducing the new structure, the ministry also plans to make the use of MyKad compulsory when buying petrol.

“There are some Thai nationals who drive into Malaysia to fill up their tank because petrol is such an expensive commodity in their country,” he said.

In Muar. Deputy Prime Minister Tan Sri Muhyiddin Yassin said the Government was in the final stages of drafting a policy on the fuel subsidy which will be a “win-win situation” for both the Government and the people.

He said that the new policy would identify people who were eligible for subsidy.

Umno Youth chief Khairy Jamaluddin had previously broached the subject about giving petrol subsidy to the right people. He said the subsidy must reach only the people who needed it most and giving subsidy across the board was a misallocation of funds.

On the subsidies for flour, sugar and gas, Ismail said they would be retained.

“Although the price for sugar has been increased by 20 sen, the Government is still providing subsidy for the commodity,” he said.

Ismail food outlet operators should not take advantage of the increase in sugar price to mark up the price of their products.

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Some things are simply impossible

Postby admin » Fri Jan 22, 2010 5:19 am

Two prices for petrol won’t work, not even in Malaysia

IT IS May 1. Malaysia is in the midst of a major experiment. It is, in the true spirit of “Malaysia Boleh”, embarking on something that had never before been done anywhere, anytime successfully.

If we succeed, it would be yet another world first. It would dwarf the Petronas twin towers in terms of impact. Climbing Everest – which has been done by over 1,500 people – will be nothing in comparison.

Sailing around the world has been done many times before and is no longer necessary since we have powered boats, but that will be a tiny drop in the oceans sailed compared with what we are attempting to do now.

On that day, I take my 20-year-old BMW 525i — those of you who know cars know that it has a 2.5 litre engine but the car value is less than RM25,000, way below the price of any new car — to the petrol station.

I go to the pump where petrol costs RM1.80 a litre, but no, they look at my car and say that it definitely does not have an engine capacity of 1.6 litres or less. That means I can’t fill up there, they say. Go that way and pay RM2.10 a litre.

Why? I asked. I am not rich, but I am not poor either. Why ask me to pay the price the rich pay for their petrol? Just because I drive a high engine capacity car (its terribly old, by the way), does that mean that I am rich and therefore must pay more for my petrol?

The petrol pump attendant looks askance at me. He’s pleading with his eyes. Behind me, a Haji waits with his old Mercedes Benz in tense negotiation with another pump attendant. There are three or four negotiations going on.

In petrol kiosks across the nation these scenes are repeated – it takes 30 minutes to fill up your tank even if you drive a car with an engine capacity of 1600cc or less. But then, this is Malaysia, the land where anything can, and does, happen.

By this time, the petrol attendant has a twinkle in his eye. “Sir,” he begins, hopefully, “you fill up your tank at the old price, but you just pay RM5 to me, OK? You win, I win.”

I do some quick calculations. A full tank will mean at least 60 litres. At 30 sen a litre, I save RM18. Give him RM5 and I am still RM13 up. Yes, that’s a good deal, far better than having to pay RM18. I signal to him.

In a thrice the price changes on the display. I fill up, and surreptitiously hand over the five bucks. I saunter over to my car, start it and nonchalantly drive away. Another day in boleh-land.

Poor Pak Haji has more scruples. He continues to protest but for him, poor as he was, it will be higher prices for petrol. But unlike Pak Haji, most people are quite happy to avoid paying their dues to the Government.

Back home, I turn on the TV to watch the Domestic Trade and Consumer Affairs Minister aver that this latest move to have one price for the rich and one for the poor will save the government hundreds of millions of ringgit a year. Really?

You might know that we already have had two prices for diesel. Fishermen pay lower prices. Can you guess what happened? Their consumption of diesel increased considerably – I think it was two- or three-fold over two to three years. But here’s the strange thing: the amount of fish caught did not – it declined!

How is that? I don’t think they went on joy rides on subsidised diesel. There is just one explanation – the fishermen, at least some of them, were siphoning off the diesel to sell it to others at higher prices.

It made them richer, but I am sure that was not the way the Government – or the public – wanted it.

When you subsidise everyone, it is easy. One price for everyone. The only problem is smuggling across the borders. And since oil is a bulky item that requires considerable storage capacity, it is not easy, provided Customs officials are straight and vigilant.

Oh, Malaysia, my heart bleeds for this country of mine (and yours too). The solution is so simple and yet we don’t see it – which has to mean that we don’t want to see it. We want to touch our noses by moving our hands behind our heads first.

There is just one way to solve the subsidy problem – much like the solution to the AP (approved permit) problem. Simply abolish it – and that goes for the associated taxes too. (If we have a tax that is greater than the subsidy, we are NOT subsidising the product.)

That way, everybody pays the true price of goods. If prices go up, we all pay for it. If prices go down, we all benefit from it. If we use more of it, we will pay more, and vice versa. The rich will use more oil and they will pay for it. The poor use less and pay less. Simple.

We must have just one price for one grade of product. If the world price moves too high, and considering that we are net exporters of energy, we may choose to subsidise the oil price. But still, one price is what we must have. Anything else spells disaster.

If the Government wants to relieve the burden on the poor, then simply establish an effective, tamper-proof, independent and objective system to determine who are the poor and give the money directly to them.

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