Thursday April 3, 2008
No petrol price hike in accordance with people’s wish
Comment by V.K. CHIN
DATUK Seri Abdullah Ahmad Badawi said last week there would be no increase in the petrol price, since this was the wish of the people. The Prime Minister said his administration had accepted and recognised the strong message of voters as reflected in the result of the 2008 general election.
Prices of petroleum products, such as petrol, diesel and natural gas have always been associated with rising costs of consumers goods and, hence, an increase in the cost of living.
Pak Lah could have given this assurance during the election campaign but did not because the cost of fuel is dependent on the global price of crude oil, which is beyond the control of any government.
It would have been difficult to give such an undertaking without first taking into consideration what petroleum subsidies could do to the economy.
He and his colleagues therefore preferred not to make promises that they might not be able to keep, especially if such a decision could damage the nation’s financial position in the long term.
Since voters felt so strongly about this issue, the Government had to accept the will of the people. But this is only one part of the story since profiteering by unscrupulous firms and traders must also be taken into account.
Firm action must be taken against these businesses to stop such unhealthy practices. It is true that many of those in the lower income group are feeling the pinch of rising prices of essential goods.
They can see the ringgit buying less, especially when they go marketing or shopping. Many food items have gone up in price and a stroll in any supermarket will bear this out.
They expect the Government to do something to ease their financial burden, and this is not going to be an easy task. One way out is for wages of workers to be increased but there may be problems with employers, who will resist such a move.
If this should be enforced, manufacturers and businesses would have to pass on the additional cost to consumers, thus negating any salary revision.
There may be a stronger case for a cost of living allowance for those working in cities and major towns where the standard of living is very much higher than those in other areas.
Apart from this, maintaining price stability of consumer goods would be the responsibility of the new Domestic Trade and Consumer Affairs Minister Datuk Shahrir Abdul Samad.
He has already made known his views when he officially took over the portfolio from his predecessor Datuk Shafie Apdal. He is against price controls and prefers market forces to do the job.
His thinking on this subject is that, if necessary, the Government should allow imports from neighbouring countries through the Asean Free Trade Area. This would prevent manufacturers from creating an artificial shortage of products in order to push up prices.
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