JAKARTA, May 10 (Bernama) -- Malaysia may no longer afford to provide price subsidy for fuel when it becomes a net importer of oil in 2014, said former Malaysian prime minister Tun Dr Mahathir Mohamad.He said that in the present situation, Malaysia was more fortunate than Indonesia as the Malaysian population was 10 times smaller and the country's fuel consumption was much less compared to Indonesia which had to import oil as its domestic consumption had exceeded production.
"Although Malaysia's oil production is much smaller than Indonesia's, we are able to export 250,000 barrels per day and when its price increases, the government is still able to provide subsidy," Dr Mahathir, who is also Petronas advisor, told reporters here Saturday.
Dr Mahathir is here to attend and deliver a speech at the convocation of the Pancasila University.
When asked by local journalists on his view regarding the current increase in the world oil price, he said when domestic oil consumption had exceeded production, the government would not be able to utilise income derived from the increase in the oil price to provide subsidy to the people.
This would become a major problem to the country, he said, adding that there was a need to look for alternatives such as the use of manpower, which was abundant in Indonesia, which could be enhanced in terms of capacity and productivity to yield better income and reduce the consumption of imported goods.
tunku : are we prepared? by then there will be no more issue for fuel subsidy anymore.the government will have no fund to subsidize fuel.we can expect the petrol price to be around RM3-3.50 with the current oil price of USD120 per barrel.by then the government won't be able to pay oil royalty to any state.
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2 comments:
Whether the government like it or not certain economic parameters need subsidy from the government. The government has to be more smarter so that we could afford to feed our Rakyat. Just imagine with 26 million population we unable to feed our Rakyat properly how to feed a future nation with 75 million population.
Whether the government like it or not they have to feed the Rakyat. They have to subsidize the basic items so that the regular worker on the street could afford to live. For Rakyat that could afford it, they could buy different items that are not being subsidize as they wish.
Back to the gas issue i think it is about time for the government to make the gas user to pay the government gas tax at the station. Everyone has to pay the government gas tax for the gas they pump into their vehicle. For the public transportation, school bus etc they also have to pay the gas tax at the station. The government has to find other mechanism to subsidize different sector but everyone must pay all the necessary gas tax at the station.
When someone's mind is full of the terms "privatization", "corporate earnings", "mega projects" and the like, welfare economics will thrown into the river.
Subsidy exists in economics theory for price stabilisation mechanism. But that also means that "negative subsidy" situation (where retail price is higher than prevailing price)when prices are at low levels so that the coffer will be filled up for use during needy times like this.
But just wonder whether our leaders, the past and present, have been doing this.
Tak Dak Nama 3.
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