Cut The Fuel Price? Or Take The Opportunity To Revamp?

The government announced another fuel price cut yesterday (14-Oct-08) to RM2.30. Instead of keep reducing fuel price while maintaining the fuel subsidy, I think there could be a better approach to tackle this fuel price issue at a broader level.

The crude oil price has dropped to around USD80/barrel recently, where our petrol price is still remained at the considerable "high" price. We citizens had already "used to" the "high" petrol price. The inflation caused by the previous 40% petrol hike is no where to be reversed despite the recent 40 cents fuel price reductions.

If BNM statistic is right, our inflation rate is still not at an alarming rate, and no special intervention is needed. Hence, it is not necessary to stir the current economy balance. Instead, the crude oil price drop and our relatively high fuel price has presented the best opportunity for the government to remove the fuel subsidy, and float the fuel price.

Despite all the potential objections, I echoed Tony Pua's stance on this and I believe the removal of subsidy could be good for the country economy in the long run, especially the upcoming worldwide financial turmoil.