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Petrol pricing: Repeating a mistake is a crime Print E-mail
Friday, 22 January 2010 01:02

Recently, there have been several comments on the so called 'proposal' by the government to create a structured pricing mechanism for petrol that has led to a lot of confusion among many. Some respond to the issue at hand with understanding and clarity and some in their bewildered state of mind. This is where I take the liberty to put in my two cents worth.

Let me try to unravel the intention of the government about this structured pricing system of selling petrol. I think the intention of the government is a noble one. 'But many a good intention paves the way to hell,' is the adage. My earnest and sincere prayer is that it does not become a morbid and sordid reality in the current context of this petrol subsidy.

What is the intent and purpose of this two-tier (or is it a multi-tier) system? Maybe the Malaysian government wants to address the criticism that in Malaysia, when a policy is not specifically targeted or it is not explicitly determined as to who should be its beneficiaries, the subsidies intended to benefit a specific target group reaches only a certain section, which is not in real need of a subsidy. Or rather, it reaches a slice of the community that can afford to buy the fuel at its original price.

It may also be true that the Malaysian government wants to gently steer clear and wean off its citizens from the subsidy mentality in order to prove to the whole world that it is fast becoming a high-income economy and in order to hit that status, subsidising essentials, welfare grants and other such provisions must be kept under check and to the very minimum.

However, policy-planning cannot be ad hoc, as and when to please someone. Rather it should arrive at a holistic solution to a whole range of issues. A proper negotiation and thinking through process should be initiated and instituted prior to setting up of the mechanism to ensure that it is fool proof.

Much of our policy implementation and service delivery is weak simply because of the fact that the participation of the grassroots in the decision-making process on ground realities is lacking or rather missing.

As this policy is going to affect every single Malaysian from any walk of life, greater clarity in policy-making is needed. A policy such as this cannot be given birth in sheer sentimentality and emotionalism. I totally agree that the subsidy mindset syndrome of the Malaysian society needs to be addressed effectively and efficiently. It is good in the long run. But how, and through what mechanism is the million dollar question milling around in my mind.

The government had previously introduced a rebate system. I believe that did not produce the intended results neither was it appreciated by the Malaysian public. A multi-tier scheme in the sale of petrol cannot do justice to all. Moreover it will certainly lead to abuse and corrupt practices. We saw that happening in the fishermen's subsidy.

What is the control mechanism? I am sure the government while its striving towards good governance and a zero corruption goal cannot afford to bring forth practices that will be the potential breeding ground for yet other kinds of corrupt practices.

If you go by the capacity of a car, a family may have many cars catering to the needs of its many family members whereby they may have two or three cars with a lower capacity. Then do they warrant a subsidy? And some times these high-powered cars when bought as secondhand ones might be cheaper than a new low-powered car. How do we justify this subsidy then?

If we decide to limit the quota of petrol consumed by a customer, what about low-wage earners who usually stay far from their work places? What about budding salesmen who have to travel great distances to earn their bread and butter?

If the government is going to sort out all these discrepancies just by inserting a micro-chip into our MyKad to determine who is eligible for this subsidy, imagine the millions to be spent in correcting the system and the time taken to produce these new MyKads. Is it worth the effort?

How about those permanent residents who are single parents with children who are born and are being brought up here, people who have adopted Malaysia to be their second home? How will we distribute unequivocal justice? Do we have an answer for this question?

Ultimately, all government policies should be justice-focused. A total cost benefit analysis is mandatory. How is this policy in its day-to-day practicality and reality going to affirmatively affect the poor and the low-income families? Is there a better and cost-effective mechanism that can be designed and derived at so that both the government and the public do not end up as definite losers?

Policies cannot be formulated for the sake of having a ' feel good' tendency. Repeating a mistake is a crime and it can show up the government and the policy-makers in a bad light. There can be many other creative and innovative ways to help the poor. Those avenues should be resorted to.

Correcting the woes and miseries linked to the public transportation system and relocation and allocation of housing are a few that deserve mention. Let there be a proper study done incorporating the views of the public, especially those struggling at bottom rungs of the society before policy mechanism is planned and implementation is done. Undoing damages done cannot be cost effective and it will mock us in being penny-wise and pound foolish.

Source: http://www.malaysiakini.com/letters/122603



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