Kok Fah raised a very good analogy in his latest blog entry. If you were a pork farmer, you would be happy that the pork meat price is increased. This means you could earn more. Therefore, when you go to market and buy more expensive pork, you will not even complain a word, because in your calculative mind, you know that you are earning far exceed the amount you are spending on the purchase. But looking at the fact now, are you happy to live in a petroleum exporting country Malaysia, but the petrol price is the highest in all these oil producing countries? Is this socially just and fair?
I must clarify my stand that government's subsidy should only be reduced or abolished once they have done enough to cushion the fiscal economical negative impact. Definitely not at this stage. Increase the fuel price now is unjustified. In a few years ahead (a year or two before the country becomes a net importer) i support the policy of slowly increase of the fuel price.
Other way to resolve this, is to pay greater compensation for car users, in a bid to raise people's real income. The situation now is gone out of hands, not good for the poor, and not good for the rich either. Not good for BN government's reputation/credibility, not good for economy too. So, what is remaining good to remove the subsidies now?
Here is a clever piece of calculation by someone included in RPK's recent blog writing. I recommend you to read, you'll be inspired.
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