55% Diesel Hike - Last Time Something Dumb Like This Happened Was Under Abdullah Badawi

 

https://www.straitstimes.com/asia/se-asia/malaysia-s-diesel-subsidy-cuts-will-not-raise-inflation-say-analysts

• KL – M'sia cut diesel subsidies, float to market rate RM3.35 per litre 
• increase of 55% from RM2.15, starting from midnight on June 10.
• will not have much impact on inflation observed experts
• (OSTB : They are the dumbest experts)
• previous price for diesel, announced on June 5, RM2.15 per litre.
• Lower- and middle-income groups not affected 
• monthly RM200 cash handouts
• can purchase 148 litres of diesel each month 

My Comments 

A little before 2008, Abdullah Badawi raised the price of petrol by 70 sen per litre. It sent the economy into a shock. The direct result was that in 2008 Badawi lost the 2/3 majority in Parliament and FIVE States. In 2009 Badawi was kicked out.

In 2014 Najib imposed the GST at 6%. A huge bungle. The direct result was that in 2018 Najib and the BN lost the elections - after being in power for 61 years (1957).

As of midnite tonite the price of diesel is going to jump by RM1.20 sen per liter from RM2.15 to RM3.35 per liter.  (This is worse than Abdullah Badawi's 70 sen per liter fuel hike before 2008).  This 55% overnite increase in the price of diesel is going to choke the economy again. 

There is no way the inter-city and inter-state bus fares are NOT going to go up. The long distance bus operators and the lorry and truck operators will be the first ones to be hit by this 55% jump in the price of diesel.

If the long distance buses cannot increase their bus fares some of them may just stop operating. Truck operators will all have to increase their freight rates.

Therefore the prices of everything under the sun are going to go up. Vegetables from Cameron Highlands, chicken sent by truck from Manjong, fish transported by truck around the country, any item delivered by a truck that burns diesel fuel. All the prices will go up.

Even if they increased the price of diesel by say 15 sen per liter every three months, they can remove the subsidy fully in 24 months. That would be less of a shock on price inflation and on the economy.

Lets see what happens tomorrow. It will not be nice. The people will suffer.

The views expressed are those of the writer and do not necessarily reflect those of MMKtT.