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Tuesday, January 19, 2010

INTERVIEW: Still in the dark over system

The Star, Sunday January 17, 2010

Still in the dark over system


The Government’s plan to impose a two-tier pricing mechanism for petrol by May 1 has given rise to many questions but answers are hard to come by. Just how will the mechanics be worked out?

THE Government wants to cut down on subsidies it pays on petrol by implementing a two-tier pricing system by May 1. Domestic Trade and Co-operatives and Consumerism Minister Datuk Seri Ismail Sabri Yaakob says the principle has been agreed upon but details are still being worked out. He has asked the public to give him their views via his Facebook.

The move to reduce subsidies, including for sugar and other consumer products, is a very sensitive and difficult process, he admits.

OTOREVIEW'S NOTE: Here's an Interview between, The Star Reporter, Shahanaaz Habib and Domestic Trade and Co-operatives and Consumerism Minister Datuk Seri Ismail Sabri Yaakob.  ENJOY:

Q> People want to be informed early about the new fuel pricing mechanism so that they can be prepared.
A> I agree but we have not fully settled on the exact mechanism. It’s still under discussion, that’s why we are still unable to announce details at this moment.
What I was able to announce is the principle of the subsidy. Wherever you go in the world, subsidies are targeted at needy groups. In the case of petrol for our country, the poor or the middle income group.

But now everyone is getting the petrol subsidy, including foreigners, which means the Government is subsidising citizens, non-citizens and the well-to-do. This is wrong. The principle of the new mechanism is that the subsidies will be given to only the targeted group.
Filling up: Details on the two-tier fuel pricing system are still being worked out.

Q> Since the Government is still discussing the mechanism, maybe it won’t be implemented in May?
A>That May 1 date is still on target but it will only be for the peninsula. For Sabah and Sarawak, the implementation will be later. The people there use four-wheel drive vehicles to get around and most are about 3,000cc. Even the poor are forced to use that because of the terrain. We will eventually have a mechanism for them.

Q> How can people give their feedback constructively if they are not given some details of the proposal?
A>But they are already doing that now. Even though no one is certain about what is going to happen on May 1, the debate and discussion have already started. Even the principle of the subsidy is being questioned. Even the rich are thinking they should be entitled to the subsidy.
We are listening to the opinions and suggestions.

Q>Is the Government looking at engine capacity or the make of the car to determine who gets the subsidy? What engine capacity are you looking at?
A>With cars, the best is to look at engine capacity. It’s wrong to go by the brand because that would be perceived as discriminating against a make. You can’t say whoever owns a BMW is not entitled to subsidised petrol; BMW would be mad at us. That’s why engine capacity is the best consideration. As for the engine capacity, we will announce later.

Q> How about expensive cars like the Mini Cooper, which has a small engine but cost over RM200,000?
A>There are also some kampung folk who use very old Mercedes Benz, which is very cheap – costing about RM10,000 – but the engine capacity is big. Whatever we do, we can’t cover 100%. There are bound to be some who won’t be covered. This is true of whatever policy we make; it can’t be 100% perfect. - Has the CHEEK to say  this comment, WHAT A DOOFUS! ED.  There will definitely be some who are not satisfied or who terlepas (escape).

Q> Will there be two different pumps at petrol stations?
A>We are still working out the mechanics but definitely not two pumps. We are looking at pumps having two prices or perhaps just having the market price on it but those entitled to the subsidised price get to pay less and get receipts for it.

Q> Who decides on the engine capacity at the petrol station?
A>We are considering putting a chip into our MyKad to register the car that’s entitled to the subsidised petrol. Each person is eligible for subsidised petrol for only one car. It’s not fair if you have 10 (small engine capacity) cars and you get subsidies for all 10. If the car is registered to different people, for example the wife, son or daughter, then each is eligible to the subsidy; one person per car. Children have to be 18 or above because, to own a car, you must be at least 18.

Q> So we won’t be handing our MyKad to some foreign petrol attendant to check?
A>I don’t think that will be the case because these days we are IT savvy. It’ll probably be swiping, like you do with the credit card. It will be a convenient system.  - What can I say!?? ED

Q> People who own big cars grumble that they already pay high duties for the imported cars. They are also paying high road taxes, so why shouldn’t they enjoy subsidised petrol because they are taxpayers too?
A>The principle of the subsidy is that those entitled are the poor and middle income group. But we are listening to all views and there have been so many because everybody has been talking based on presumption.

Q> But people argue that it’s better to disclose some details of what the Government is proposing so that they can give their views rather than speculate.
A>I can’t give details because we are still discussing (them). In due time, the Government will announce the engine capacity and whether there is a cap on how many litres per person per month. If there is no cap per car, people will abuse it. They will use their Mykad to buy as much petrol as possible, transfer it into a drum and then sell it to those who don’t qualify for subsidies. So the question of how many litres will be announced later. MAN!  This guy speaks without WISDOM! - Ed.

Q> How about those who travel outstation for work or those in big cities who travel long distances daily because they can’t afford to buy or rent homes near their offices?
A>We are looking at all angles. Someone who lives in a small town and goes to work nearby will benefit. We haven’t fixed a cap yet but if there is no limit, it will definitely be abused. Those near the Thai border will sell it over the border and, in other places, people will sell it to those who are not entitled. So there should definitely be a cap.

Q> Is the Government also looking at reducing the subsidy on diesel?
A>Not right now. The real market price should be RM2.09 per litre for diesel but fishermen pay only RM1.20, public transport such as school buses, public buses, lorries and prime movers pay RM1.43, normal cars RM1.70 and airport taxis RM1.58. - This is the ONLY PART OF THIS INTERVIEW HE SAID WHICH was NICE TO READ.  The rest?  Read on...  YOU'LL BE PISSED with what he SAYS!  You've been warned - ED

The multiplier effect of diesel is different from petrol because petrol is not used for public transport and to transport goods. If we increase the price of diesel, bus fares will go up and the price of goods will increase immediately because transportation costs would increase. School bus operators, too, would want to hike up fares. There are a lot more considerations with regard to diesel than petrol.

Q> What products is Malaysia still subsidising? Are we moving towards a no-subsidy regime?
A>Sugar, cooking oil, flour, ST15 rice, petrol, diesel, LPG gas, and NGV gas for taxis. The fuel subsidies make up the highest amount. It was RM5.6bil last year (in 2008 when world oil price was higher, the subsidy was RM18.8bil).

We are not moving towards a no-subsidy regime yet. I don’t foresee us doing away with the subsidy for basic items like rice and petrol. What we are trying to do now is to focus on the target group. There has been too much leakage because people who are not eligible are getting subsidies.

Q> It has been reported that Malaysia by 2011 will be a net importer of oil, so shouldn’t we stop giving subsidy for oil?
A>The people are not ready. When I raised the price of sugar by just 20 sen, people got angry. We must educate our people. The problem with us is that when we get something, there is no way the Government can take it back. Sugar was never a subsidised product. The Government only started subsidising sugar in 2009. Before that, because the world sugar prices were low – at US$14.50 per kg – we had no subsidy at all. But last year, the price shot up. The Government wanted to cushion the effect and started subsidising sugar. Taking it back now is very difficult because people think it is their right. - I AM SPEECHLESS with What he said... He clearly speaks without thinking...

Q> Isn’t there ample justification to withdraw the subsidy on sugar because less consumption is better?
A>Many people, including consumer and health groups, feel there is no reason for the Government to subsidise sugar because it is bad for health. It can be likened to subsidising cigarettes. The sugar subsidy only makes people use more sugar every day and this will increase the number of chronic illnesses in the country.

This is what people should understand. We have to educate people and make them aware. If we do not educate them, it would be difficult because we have been enjoying subsidies for too long. Last year, the subsidy for sugar was RM720mil. This year, despite the 20 sen increase, the Government will have to fork out an even higher subsidy of about RM1.008bil.

Q> Biscuit and soft drinks manufacturers buy sugar at subsidised prices too. So can we have a two-tier system where industries pay the real market price?
A>We should actually do this. The problem is if we do, there will be a shortage of sugar because people will start hoarding sugar. Retailers, too, will manipulate the supply and sell to industries as they pay higher prices. This will cause problems for consumers. As far as retailers are concerned, why should they sell to consumers for RM1.65 when they can sell at higher prices to factories?

For example, if the real market price is RM2.45 and the factory offers retailers RM2.20, the factory saves cost and the retailer makes more money than selling it for RM1.65 to consumers. That’s our worry about putting two prices for sugar in place. This is what happened with subsidised diesel being sold on the black market.

Q> What is the hardest subsidy for the Government to withdraw?
A>Everything! The Government will spend RM104mil this year to subsidise flour. Last year, it was RM89mil. If we cut this, the Indians and roti canai lovers will make noise. So we are maintaining the price at RM1.35 because it is a staple food for Indians. Rice, too, is staple food for the Malays, Chinese and also Indians. It is also very hard to raise diesel price because the price of other goods will go up.

As for petrol, we just have to raise the price by 5 sen and people will get angry.

 With sugar, too, people made noise when we hiked the price up by 20 sen even though sugar consumption is known to cause harm. However, they are not really worried about sugar consumption at home because they consume only 1kg or 2kg a month and a 20 sen hike per kg is not a burden at all. What they are worried about is the multiplier effect – the effect it would have on food prices outside.

Q> Has the objection against the sugar hike been very serious?
A>Not so much because consumer associations have come out in support of the Government. We argue that for health reasons people should consume less, so why buy sweet things outside? But people still fear a hike in prices of food products. That’s why we will continue our campaign of reducing sugar in food and drinks.


Man, I have only 2 WORDS after reading this INTERVIEW.  I'm very disappointed with what he said.  Clearly, he is INSENSITIVE with what he said, saying the RAKYAT Spoiled, RAKYAT will make noise, this and that...

He even have the CHEEK to quote this:  "Whatever we do, we can’t cover 100%. There are bound to be some who won’t be covered. This is true of whatever policy we make; it can’t be 100% perfect. There will definitely be some who are not satisfied or who terlepas (escape).".    WHO DOES HE THINK HE IS?  Reading the above makes me PI$SED OFF!!!

MY 2 WORDS: "SACK HIM!!!".   This will END ALL THIS HAVOC he's trying to CREATE BY MAY 1.

Cause he's Insensitive to the RAKYAT NEEDS. As I highlighted the above article in "BOLD AND ITALIC".

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