O' Yee Of Good Faith

Greetings,

Last night the Govt announced that the price of petrol at the pump will go up from MYR 1.97 to MYR 2.70 (roughly by 40%). I was a little taken aback with the announcement because I would have thought the Govt would have pushed the price up a little at a time till it reached a value they were ok with.

If you didn't know, here in Malaysia, the Govt spends a huge chunk of change on subsidising petrol for everyday consumers. They've been able to keep the price low and stable for a long time now, but with the new price hikes and other issues coming in, I think re-organizing the petrol subsidy is a good idea. The new plan to redistribute the subsidy and other changes are shown below, taken from the Malaysian newspaper The Star.

The Changes

Price increase

Petrol – RM0.78/litre
Diesel – RM1/litre
Electricity:
Commercial and industrial – 26%
Retailers and small restaurant operators – 18% (for first 200kWh per month)
Residential – new pricing structure for users above 200kWh per month

Prices effective today 05/06/2008 (per litre)

Petrol – RM2.70 (previously RM1.92)
Diesel – RM2.58 (previously RM1.58)

Rebates

> RM625 per year
For private vehicle with engine capacity of 2000cc and below, including private pickup trucks and jeeps with engine capacity of 2500cc and below.

> RM150 per year
For each private motorcycle with engine capacity of 250cc and below

> RM200 reduction on road tax
For private petrol and diesel vehicles with engine capacity above 2000cc

> RM50 reduction on road tax
For private motorcycles with engine capacity above 250cc

Streamlined diesel subsidy
(for approved transportation companies, vessel owners and fishermen)

> Diesel – RM1.43 per litre (previously RM1 per litre for fishermen and RM1.20 per litre for vessel owners)

> RM200 per month for every owner and employee of Malaysian-owned vessels registered with the Fisheries Department

> 10sen per kilo incentive for every kilogram of fish caught by registered vessels

> 10sen per litre for every litre of diesel used by river transportation operators according to approved quota

Gas subsidies restructure
(for Peninsular Malaysia)

> For power producers – from RM6.40 per mmBtu to RM14.31 per mmBtu

> For industrial users (consuming less than 2mmscfd) – from RM9.40 per mmBtu to RM24.54 per mmBtu

> For industrial users (consuming above 2mmscfd) – from RM11.32 per mmBtu to RM32.56 per mmBtu

Electricity tariff restructure

> Households using 200kWh and below every month will not be affected. This covers 59% of households in Peninsular Malaysia with a monthly bill under RM43.60.

> Commercial and industrial users face 26% increase. Small retail and business outlets consuming under 200kWh per month face 18% increase.

Liquefied Petroleum Gas (LPG) and Natural Gas for Vehicle (NGV)

> No change. Prices remain at RM1.75 per kg (LPG) and RM0.635 per litre (NGV)

Oil palm windfall tax

> For Peninsular Malaysia 15% for every tonne of CPO exceeding RM2,000

> Sabah and Sarawak 7.5% for every tonne of CPO exceeding RM2,000 > Abolition of cess tax

Service tax threshold for restaurants and eateries

> Service tax now for restaurants with annual sales of RM3mil (previously RM500,000)

All in all, I think its a positive move by the Govt. Sure, prices are going up, but its not as bad as other countries. We need to buckle down people!


Dav out