5/28/2008

No to subsidised petrol for Singaporeans

It is a right move by the Malaysian govt to stop subsidising petrol to foreigners. On a matter of principle, a country should only subsidise living cost to their citizens. Subsidising foreigners is like giving away taxpayers' money. It must be citizens first. I think Malaysia should be very appreciative of our ingenious 3/4 tank rule. It puts a lid on Singaporeans benefitting from their generosity, or exploiting their generosity. On the business point of view, to attract foreigners to spend money in Malaysia, especially around JB, now that is a different issue. Big shopping centres don't mind giving special discounts or offers, or giveaways to attract shoppers. Is the subsidised petrol a giveaway discount to attract shoppers? Issues like this cannot be simply done away with. It is quite complicated and need a little more thoughts.

5 comments:

  1. Meaning that it is good for the economy if the government inflate prices artificially. If we were to understand why COL has shot through the ceiling, the root cause is not only due to external factors but also internal. A few examples of the government's meddling into our COL are FW's levy, maids levy, consumption taxes, 3/4 tank ruling, GST, ERP and etc.

    Inflating all these adds to our overall COL. So does it mean that by doing such the economy improves(they say as the economy is improving, they will increase their salaries, civil servant's pay, cost of some government services need to increase, etc).

    Once all the above goes up, it is impossible to bring them down? The economy will be negatively affected? I believe we are not asking too much for the government to react positively and begin reducing some taxes and levies. They are very good in fine tuning right? Are they? Definitely there is a point where citizens' threshold of pain will be reached.

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  2. Reduction of any of the items mentioned will be considered as subsidy. MM already said NO, so hoping for any such reductions would be like asking for blood from a stone. Yo are right, once these prices are up, they will never come down, even when the external influencing factors are normal again. he only way for the ordinary people is to work smart and improve, following what MM and PM have been advising us to do. Tightening of your belt also help, btw.

    Or if tak boleh tahan, then be a quitter. No shame in that. If you want to stay, don't complain too much. Just bite the bullet and keep quiet. Maybe some crumbs will fall from the table of the plenty and you will be lucky to grab a few of those.

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  3. What Malaysia does is their business.

    The SG.gov is correct in not subsidising fuel.

    This is in line with healthy free-market principles.

    Good job.

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  4. the differential in pricing was done without any cross border intent. malaysia did it for their people at a price they are happy with as a oil producer.

    it only becomes a hot issue when the differential became too big and singaporeans living near the causeway saw the comparative advantage of pumping petrol there despite the 3/4 rules. and in a way, it also helps to generate business around jb.

    it is only natural for motorists to want to pay lesser as long as the savings is good enough for the inconvenience. and malaysia would have to weigh the pros and cons of this differential pricing. it has become a loss leader to attract singaporeans to shop and spend at jb. and the 3/4 rule has also prevented singaporeans to take full advantage of the price difference.

    it would be a totally different scenario if there is no 3/4 rule. singaporeans will flock across just for the petrol.

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  5. What you've illustrated is economic reality at work.

    When you have one market, and two prices for the same item, guess what's going to happen? People are going to devise all sorts of "plans" to pay the lower price.

    "People respond to incentives"

    So the govt steps in. They make it worse. Now one group gets a "free kick" -- e.g. the people with SUVs with dual long range tanks.

    As long as there are govt subsidies, there will be a black market. I would say it is possible to buy subsidised fuel on the black market in Malaysia.

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