The Prime Minister has announced that the price of petrol will increase by 40% to a new price of RM2.70 per liter.
I wrote earlier that we have to seriously look into the various subsidies that exists in Malaysia and formulate a plan to eliminate it totally. Why? Because state intervention through subsidies should be an interim measure, not the end solution to economic problems. Well, it looks that Malaysian subsidies on petrol and other fuel products is a thing of the past though I am sure there are many people who will not (and are already not) happy with it.
We should expect to see the prices of other items increase dramatically and that is a dangerous thing for the economy. Discontent and unmanaged energy like that is likely to lead to a lot of headaches. What is missing is the plan to generate economic activity so that people can start earning more. People will need to be more efficient in what they do and not create economic ‘waste’.
Its not a matter of reducing costs but being more cost efficient. Anyway, it’ll be interesting to see what happens in 7 hours time when Malaysia awakens to a new, more expensive day.