Wednesday, May 25, 2011

Subsidies Is Subsidying

The latest rumble of a Ron95 increase is a flip-flop to me.

Never make commitments you cannot keep.

You cannot Kickdefella when he gave a concise explanation against any reduction to fuel subsidy and the current eventuality.

If the Govt was more stringent in it's monitoring of the various GLCs, losses for example in the case of Sime Darby, these are the billions that the Govt could have saved and re-invested for returns, maintaining some of the essential subsidies.

The BN Govt is losing it.

Datuk Rocky's post stated that there is "still too many in the lower income group..Forty percent of wage earners in the urban areas are in this category" and BigDog queries subsidies of a different kind, a few days short of a year ago.

BN can forget about the residual support it has in the urban and suburban areas.

While trying to preserve it's rural Malay support, it now goes about detaching itself from the very same who would be most effected by the removal of these subsidies, sugar, now petrol and maybe diesel.

It is not so much the price increase per se but the domino effect on prices of products and services.

Price, this is the only thing that goes up, at every fuel price increase, and never come down. Worst still, prices which do not commensurate relatively to these increases.

I would not be wrong to say that there are unscrupulous people in business who look forward for these increases. It gives them an opportunity to better their profits.

How is the Govt so sure that these cuts in subsidies will not impact the rural folks?

And even if they did not, remember that the rural populace have urbanite children, relatives and friends who would not take these measures too kindly.

Our good friend Datuk Seri Anwar and his comrades in arms will no doubt exploit the issue. It's expected and easy for them to make highfalutin promises, mere cheap bait.

In this respect, the Govt is forgetting that the new electronic media and social communication, the forte of the rabid opposition shrewdly exploiting any weakness and seemingly missteps on the part of the Govt, will de ja vu them this time into oblivion.

In the short term and planning for a long term solution, the Govt should encourage energy saving measures, reducing private transport, car pooling and the use of public transport. It makes economic sense for both the public as well as reducing the cost of Govt petrol subsidy.

The Govt is subsidising our petrol needs but it relies heavily on Petronas and because of the extensive use of private transport, Malaysia is diminishing as a net exporter due to rising fuel imports, increasing the cost for subsidy.

Business and public transport rely heavily on diesel which brings to one solution, BIO-FUEL not to mention it being environment friendly. Commercial biofuel diesel is already being manufactured from oil palm.

"The rosier outlook lies in its future utilization as feedstock for second generation biofuel, where the entire waste biomass can be harnessed in the production of renewable energy, cellulosic ethanol, biogas, biohydrogen and bioplastic.

"This energy is not only cheaper but also more efficient and environment-friendly than fossil fuels. The carbon credits derived under the CDM Kyoto Protocol increase the economic viability of palm diesel as a renewable fuel.

"In Malaysia, biodiesel is an emerging industry, encouraged under the new five-fuel diversification policy, with deliberate inclusion of renewable energy as the fifth fuel"

Private as well as commercial transport will have an alternative to fossil fuel which Malaysia could provide in perpetuity

"For the first time, air transport has the possibility of an alternative to traditional jet fuel," IATA chief executive Giovanni Bisignani

Is the Govt afraid that an aggressive R&D to develop a highly viable alternative fuel affect Petronas' bottom line? Fret not. While the Govt is subsidising the rakyat, the US Govt is doing the reverse.

What it means is that the US Petroleum industry is a very profitable and powerful one. It would not let any alternative energy replace the lucrative black gold anytime soon.

The country can have the best of both worlds, a highly profitable but less relied upon energy giant, Petronas and a having an alternative fuel perpetually for it's local needs.

Datuk Seri Najib is working tirelessly, getting foreign investments for the country as Tun MM did, and he has my admiration.

Will all his efforts come to nought if there are those who advise him economically have a hidden agenda politically?

Pak Lah's administration and decisions had benefitted the opposition more than anything else and he got kicked out.

One of those decisions was a very unpopular hike in petrol prices.

Are those who advised Pak Lah the same usual suspects advising Datuk Seri Najib?

This is what I fear.

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