The price hike in fuel (40% and 60% for petrol and diesel respectively) couldn't have been more timely. The government has justified it with two main factors; rising oil prices and strain on the government budget.

There are a few questions that may be pondered upon in the minds of the rakyat . Given that world oil prices have risen above US$130 because of supply worries and the depreciation of the US dollar, the decrease in oil subsidies may seem justified as this is a factor outside the control of our government.

However, the more important thing that the rakyat may have failed to consider with the chaos that ensued the decrease in petrol subsidies is this - what is going to happen to the surplus of funds that the federal government now has?

If ministers were telling the truth about the proportion of government spending attributed to fuel subsidies, this means the government now has 1/3 of its original budget to spend as it likes. My worry is that this surplus of funds may be misused and not reallocated to the rakyat equitably.

Anything can happen to the money - huge projects costing billions of ringgit with questionable benefit to the rakyat enabling government officials to receive kickbacks, nepotism may be practiced whereby big contracts are given to family members, more jets and submarines and maybe an increase in government ministers’ allowances?

The benefit of the fuel subsidy was that the rakyat could be sure that they were at least getting back that much of their tax money. Now, that confidence is gone. My suggestion is that the government should draw out specifically how the extra funds will be spent.

The report should be detailed in order to draw confidence from the rakyat that their money is now being put to good use.

Another worry that the rakyat should have is an economic phenomenon called ‘cost push inflation’. Since almost all goods have to be transported at one point or another using a truck, the 60% increase in diesel may end up hurting the rakyat even more since costs will almost certainly have to be passed on to consumers.

Obviously the price of goods will not increase by 60% but if inflation rates increase to 5%, this could spell disaster for the economy. Perhaps, the price of diesel should not have been increased so drastically?

I reckon that the government may have assumed that a 60% hike in diesel would not hurt the rakyat that badly since we fill our cars up with petrol most of the time and diesel is generally used for profit-generating purposes such as logistics and machinery.

Sadly however, prices might reflect an increased cost in production which will affect the rakyat adversely. Furthermore, the price of diesel is now only RM1.48 for fishermen compared to RM2.58 at the pump. I agree that the subsidy is necessary for fishermen to keep their expenses down in order to bring home a decent income.

However, the fact that this subsidy has been abused is widely known. If fishermen sell their subsidised diesel between RM1.49 and RM2.57, they are sure to make a profit since the demand for fuel is inelastic.

Who needs to go fishing if the system is such a return can be made? I propose a quota of subsidised diesel which fishermen can purchase based on the size of their engine or boat. Let’s face it, no matter how many patrol boats or marine personnel there are, as long as the monetary incentive is there, crooks are always going to find ways to get around the authorities.

This is why we need to go to the root of the problem - the fishermen's diesel pump.