Additional 5 Cents to Pressure of Living

Over the period before the Budget 2005 speech by our Prime Minister, the government announced that there will be an increase of diesel prices but maintain the prices of petrol. The government assured in their statements that they will keep our nation's petroleum prices at a competitive edge, despite the recent record high world crude oil prices. There you go, the government has step out to announce once again the prices of petrol and diesel will be increased the 6th time, since year 2000, by a damage of 5 sen per litre and gas by a damage 5 sen per kg from Friday, 1 October 2004.

Economists speculated that the continuing boom of world crude oil prices would cause the Malaysian government to further cut its petroleum subsidies, gradually. As the petrol prices already gone up by 2 cents on May 2 this year, it would be possible for another increase in the next couple of months.

However, the pump price of petrol in Malaysia, at RM1.37 a litre, is much lower than in Singapore (RM3.28/litre) or Hong Kong (RM5.75/litre). With the subsidised prices, the government would give up revenue of RM695 million while paying subsidies of RM610.3 million to keep fuel prices in the country low. From January to the end of last month, uncollected taxes from petroleum products amounted to RM6.631 billion while the subsidies amounted to RM6.74 billion.

A further boom of world crude oil prices would not only damage our pockets for petrol pumps, but also affects other commodities to transfer the burden of higher oil and gas prices to end users - no doubt it's us again. Although the government urged manufacturers and retailers not to take advantage of the increase, but does any businesses would like to enjoy a lower profit, rather than to pass the burden to the consumers?