As expected, consumers are made to pay the price of decades of failed economic policies and mismanagement. The 78-sen increase in the price of petrol now means that the price has increased by more than 300% compare to 87 sen (for diesel) in May 2005.
Failed economic policies include a suppressing of the exchange rate to make our country competitive (to favour exports which are mainly oil and gas, timber and oil palm). The government also suppresses wages by encouraging the influx foreign workers.
This fuel increase will surely lead to another round of price increases for anything and everything - from taxi fares to bus fares, from cooking oil to a packet of nasi lemak .
Our experience points to the fact that in Malaysia, price increase in commodities and basic items always benefit businesses, not the ordinary workers. A classic example is that when the price of sugar increased by 10 sen a kilo, a cup of kopi also increased by 10 sen - as if you need a kilo of sugar for one cup of kopi .
As a result, ordinary Malaysians simply cannot afford to pay market prices for petrol. Already the prices of our cars and toll (due to one-sided deals signed with toll concessionaires) is among highest in the world. Public transport is hopeless in cities and non-existent in the rural areas. People have no choice but to own cars. Many owners have to take a nine-year loan just to pay off a basic car and their car value is now less than the loan outstanding.
This is a result of economic mismanagement that has marginalised the poor, created billionaires and an income disparity that is the second highest in Asia, behind only Papua New Guinea.
Contrary to government claims, petrol is actually cheaper in Singapore, Japan or even the US when we take into account one of the fundamental principles when comparing prices across different countries - purchasing power parity (PPP).
Put it simply, Singaporeans still pay much less for their petrol because Singaporean workers earn in Singapore dollars - not Malaysian ringgit. Even in absolute terms, for example, a typical clerical employee in Singapore earns S$1,200 per month compared to RM900 in Malaysia and RM600 in Sarawak. And Singaporeans only pay about S$2 per litre
The per capital of income of Singapore is RM100,000. Malaysia’s is only S$20,000 does not produce a drip of its own crude oil. Even in Japan and US (even with their high cost and standard of living), you will find the petrol price is relatively cheaper. Please note that minimum wage in US is about US$4 per hour and a high school teacher makes at least US$40,000 a year. And petrol price there is only about US$1.20 per litre.
We should ask the question as to why the production cost, plus distribution cost, plus profit amounts to 20% of our pump price. Malaysia is a net exporter of crude oil. And Petronas is rich enough to sponsor one of the most expensive sports – the Formula One grand prix race.
We call on the government to give a full transparent and detailed disclosure of the fuel subsidy. As well as for the billions of profits of Petronas, the independent power producers (IPPs) and the oil palm and timber companies.
The government has forced the public to own cars by mismanaging the public transport sector, inflicted a high price for cars, burdened the motorists with extensive toll roads and suppressed wages. Now it wants market price for petrol.
Unions now have no choice but to demand for a salary increase of at least 50%. Unfortunately employers are going to use the higher cost of business as an excuse to not grant salary increases.
The writer is secretary, MTUC Sarawak and general secretary, Sarawak Bank Employees Union.
