Shahrir: 'Help fight price increases'
By Liew-Ann Phang, the Sun
By Liew-Ann Phang, the Sun
June 05, 2008
PUTRAJAYA (June 5, 2008): Against a backdrop of public frustration and anger over the new subsidy plan, Domestic Trade and Consumer Affairs Minister Datuk Shahrir Abdul Samad June 5 galvanised public support to help the government stem irrational price increases.
Admitting that the government is expecting a chain reaction to the new petrol price of RM2.70 a litre and RM2.58 for diesel, Shahrir told theSun his ministry is now monitoring price movements on the ground, so that drastic price hikes can be audited.
"Enforcement officers will be making inspection and I hope the public and the media will also highlight drastic increases. We can do, and will do an audit, for any business.
"We can ask the trader to do a list of his costs and if the trader’s new prices are not justified, we will advise him or her to adjust it," he said.
Shahrir said by right, there should be no increase at all because "first of all, in terms of transportation of goods, we are still maintaining fleet card system subsidies for all heavy vehicle classes registered with us including lorries and buses".
He said there are 99,375 lorries registered with the ministry.
However, when told a packet of nasi lemak has gone up by up to 30sen, Shahrir said: "There will be people raising their prices because they had to manage with, say, the increase in rice prices, and they will take advantage of the new fuel price as an excuse for the increase. However, they should not use petrol as the reason and they should be more truthful about why they had to raise their prices."
He said another reason why prices should be maintained is that the price for liquefied petroleum gas has not gone up.
The new subsidy plan, he said, provided for people to think and plan carefully on how to spend on petrol.
Resources are never infinite, he reminded, adding that this was one of the reasons the consumer associations had agreed to the new subsidy structure.
"They knew it was a depleting resource, there was over-utilisation and the subsidy then was not based on usage so there was no limit on the subsidies you can use.
"The new subsidy structure means that it is restricted to Malaysian-owned cars. The RM625 rebate provides for 801 litres of subsidised petrol a year which is a quota you enjoy at the old price and on top of it, there is still a government subsidy on petrol -- 30 sen off the market price," Shahrir said.
Here are Shahrir's answers to other questions on the subsidy plan:
Q: How will the new subsidy structure effect a typical average family in terms of expenditure?
Shahrir: There should not be changes in terms of (fares of) school buses because we are maintaining the diesel quota system. But there will be fewer trips to the malls or family outings on weekends and fewer holidays. We are hoping that it will not have an effect on food but that would depend on the family’s taste. It simply means that there will have to be changes in lifestyles. There should be a reduction of things that you used to do without thinking. The families will have to start to plan trips carefully, think about it and learn how to budget. That is part of being a citizen.
Q: What happens if there is a drastic increase in prices of products, including food, and within the transportation industry?
Shahrir: The government allocates three billion litres of diesel as quota to the transportation industry, encompassing consumers, goods and commercial vehicles. These categories comprise cargo lorries, and buses including school buses and express buses. Only 1.037 billion litres were used last year. If there is an increase, then the media and public should question them. Ask them why they are increasing their price because if they are registered with us, their prices have not been increased. They are still paying diesel at RM1.43 – same as before. However, if these operators say that their quota is not enough, you can tell them to approach the ministry and ask for more. We are willing to listen to them and their justifications.
Q: Is the subsidy plan a permanent one?
Shahri: We will have to keep updating and upgrading it. Some people will say they will buy two cars because they get more benefits (from the cash hand-out of RM625) so in that way, there will always be people trying to cheat the system. I think it is impossible to solve all the problems at one go but we will have to take a view of upgrading and updating it all the time. There will be small improvements as we go along and obtain better efficiency. We will iron this out bit by bit.
Q: How will the mechanism for the rebate or cash handouts work for vehicle owners? Will this mean they will have to produce their grants to get it and does this mean that the handouts are available for one year only (ending March 31, 2009)?
Shahrir: Yes, it is for one year. I suppose that is how you would claim (the money). My only concern is whether the post offices are geared for it because there are 6.5 million car owners to claim over the year – immediately from July 1. You have to cater to 6.5 million car owners in over 10 months which will be about a million a month. I don’t know if they have the capacity to handle it.
PUTRAJAYA (June 5, 2008): Against a backdrop of public frustration and anger over the new subsidy plan, Domestic Trade and Consumer Affairs Minister Datuk Shahrir Abdul Samad June 5 galvanised public support to help the government stem irrational price increases.
Admitting that the government is expecting a chain reaction to the new petrol price of RM2.70 a litre and RM2.58 for diesel, Shahrir told theSun his ministry is now monitoring price movements on the ground, so that drastic price hikes can be audited.
"Enforcement officers will be making inspection and I hope the public and the media will also highlight drastic increases. We can do, and will do an audit, for any business.
"We can ask the trader to do a list of his costs and if the trader’s new prices are not justified, we will advise him or her to adjust it," he said.
Shahrir said by right, there should be no increase at all because "first of all, in terms of transportation of goods, we are still maintaining fleet card system subsidies for all heavy vehicle classes registered with us including lorries and buses".
He said there are 99,375 lorries registered with the ministry.
However, when told a packet of nasi lemak has gone up by up to 30sen, Shahrir said: "There will be people raising their prices because they had to manage with, say, the increase in rice prices, and they will take advantage of the new fuel price as an excuse for the increase. However, they should not use petrol as the reason and they should be more truthful about why they had to raise their prices."
He said another reason why prices should be maintained is that the price for liquefied petroleum gas has not gone up.
The new subsidy plan, he said, provided for people to think and plan carefully on how to spend on petrol.
Resources are never infinite, he reminded, adding that this was one of the reasons the consumer associations had agreed to the new subsidy structure.
"They knew it was a depleting resource, there was over-utilisation and the subsidy then was not based on usage so there was no limit on the subsidies you can use.
"The new subsidy structure means that it is restricted to Malaysian-owned cars. The RM625 rebate provides for 801 litres of subsidised petrol a year which is a quota you enjoy at the old price and on top of it, there is still a government subsidy on petrol -- 30 sen off the market price," Shahrir said.
Here are Shahrir's answers to other questions on the subsidy plan:
Q: How will the new subsidy structure effect a typical average family in terms of expenditure?
Shahrir: There should not be changes in terms of (fares of) school buses because we are maintaining the diesel quota system. But there will be fewer trips to the malls or family outings on weekends and fewer holidays. We are hoping that it will not have an effect on food but that would depend on the family’s taste. It simply means that there will have to be changes in lifestyles. There should be a reduction of things that you used to do without thinking. The families will have to start to plan trips carefully, think about it and learn how to budget. That is part of being a citizen.
Q: What happens if there is a drastic increase in prices of products, including food, and within the transportation industry?
Shahrir: The government allocates three billion litres of diesel as quota to the transportation industry, encompassing consumers, goods and commercial vehicles. These categories comprise cargo lorries, and buses including school buses and express buses. Only 1.037 billion litres were used last year. If there is an increase, then the media and public should question them. Ask them why they are increasing their price because if they are registered with us, their prices have not been increased. They are still paying diesel at RM1.43 – same as before. However, if these operators say that their quota is not enough, you can tell them to approach the ministry and ask for more. We are willing to listen to them and their justifications.
Q: Is the subsidy plan a permanent one?
Shahri: We will have to keep updating and upgrading it. Some people will say they will buy two cars because they get more benefits (from the cash hand-out of RM625) so in that way, there will always be people trying to cheat the system. I think it is impossible to solve all the problems at one go but we will have to take a view of upgrading and updating it all the time. There will be small improvements as we go along and obtain better efficiency. We will iron this out bit by bit.
Q: How will the mechanism for the rebate or cash handouts work for vehicle owners? Will this mean they will have to produce their grants to get it and does this mean that the handouts are available for one year only (ending March 31, 2009)?
Shahrir: Yes, it is for one year. I suppose that is how you would claim (the money). My only concern is whether the post offices are geared for it because there are 6.5 million car owners to claim over the year – immediately from July 1. You have to cater to 6.5 million car owners in over 10 months which will be about a million a month. I don’t know if they have the capacity to handle it.
