Is Madani gov’t ‘ruining’ the Malaysian economy with steep diesel price hikes or is that’s its best option?

 

SUCH seems to be the narrative pursued by Madani critics with regard to what is described as “three consecutive weeks of 80 sen diesel price spike” – the latest being for the March 26-April 1 period.

As it is, detractors are crying foul that these price shocks are detrimental to the Malaysian economy when there could have been better ways to address the global Brent crude oil price spiral stemming from the US-Israel war on Iran.

The most vocal is probably former Barisan Nasional (BN) strategic communication deputy director Datuk Eric See-To who pointed to how four previous administrations “manage the surprises”:

• Tun Abdullah Ahmad Badawi’s era: Diesel highest at RM2.58 (2008)
• Datuk Seri Najib Razak’s era: Diesel highest at RM2.21 (2017)
• Perikatan Nasional (PN) era: Diesel highest at RM2.15 (2022)
• Madani era: Diesel highest at RM5 52 (2026)

“Many in the government still seem to talk about diesel as if it is the same as RON95 or RON97. In fact, it is not the same at all,” See-To penned on his Facebook page.

“RON95 and RON97 are widely used by private vehicles. But diesel is the fuel that drives the real economy.”

This is when the former loyalist of disgraced former premier Datuk Seri Najib Razak pointed to lorries, delivery vans, goods trucks, agricultural machinery as well as some fishing boats, construction machinery, forklifts, generators and various business operations relying on diesel to operate.

As such, See-To contended that when diesel price goes up, the impact is not limited to certain vehicle owners but “will permeate the entire economic chain”.

“Imagine from farms to factories; from factories to warehouses; from warehouses to supermarkets; from wholesalers to small traders; and finally to the pockets of the rakyat,” he argued.

“This explains why the decision to let diesel prices jump from RM3.12/litre to RM5.52/litre in about three weeks is not just a fuel price issue but a cost-of-living issue with inflationary effect that impacts the survival of small and medium businesses.”

Delving further, See-To took a swipe at the Madani government for justifying the diesel price hike as “a normal adjustment”.

“Diesel is not an ordinary petrol for weekend leisure use or personal driving alone but is the backbone for the movement of goods, food supply and daily economic operations,” justified the opposition-slant critic who used to pen his views under the moniker Lim Sian See.

When the government allows diesel to increase too sharply, the government is actually pushing the cost increase to the entire economic system at once.

Worse, this is not a situation where the government has no choice at all. The government controls prices. The government has the power to determine the pace of the increase.

The government has also the fiscal capacity to absorb or at least slow down the shock. So if prices are still allowed to jump so violently in a short time, that is not something fated but a policy decision.

And this is a wrong policy decision because diesel is neither RON95 nor RON97 but the logistical lifeblood and nerve of the nation’s economy. If this lifeblood is squeezed too hard, the entire economic body will fall apart. –  Focus Malaysia