Wednesday, June 4, 2008
Up, up and up
Malaysians had braced for an increase in fuel prices but the hike has been sharper than they expected. It will be difficult for Malaysians who have been used to subsidies. Their livestyles must now change unless they want to pay more. Petrol has increased by 78 sens to RM2.70 per litre from RM1.92 while the new diesel price went up by RM1 to RM2.50 per litre. That's not all. Tenaga Nasional will raise electricity rates by 18% for homes and 26% for business users. We can expect the higher cost of production to be passed on to consumers. That means you can expect our "economy rice" to be more pricey. For salary workers, without any increase in wages, their spending power has immediately shrunk. For the Malaysian middle class, who form the majority of the one million taxpayers, it is a big burn in their pockets. But there is some good news. Owners of cars of 2 litre capacity engines and below, will get cash rebate of RM625 a year and their road tax will be cut by RM200. More details are expected to be issued over the next 48 hours but as of now, the petrol stations are packed.