Back in Malaysia but…


…nothing much happening. I went back to Kota Bharu after three full days of staying in my brother’s house in Cheras. Other than going to the wedding of my friend’s brother, I met with several old friends and that’s all.

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Everybody seems to be talking about recent fuel price hike. This incident has been much taken as political issue rather than a problem that must be dealt with. We must face the fact that the world price for oil is soaring up to $135 USD per barrel. We are no longer enjoying $65 USD price point like it was when the oil price in Malaysia was RM1.92 per litre.

While the annual rebate is far from enough, it’s much better than blindly subsidizing the oil price. Here’s why:

1. It encourages petrol usage reduction.

Before this, there is no ’penalty’ of using a lot of fuel. If one use tons of fuel for business, he/she is consuming a lot of government subsidy which is meant for those who can’t afford the fuel. Now, if you use around RM140 fuel per month, the cost of the recent price hike will be covered by the RM650 rebate. If you use more than that, you will pay the full price (RM2.78) for the additional fuel.

2. Those in lower income bracket benefit the most from the rebate.

Majority of low income people is using less than 2000cc car and travel less than higher income people. By limiting the rebate to these lower income community, government is focusing its spending and could save a lot from that.

3. No more ’seludup minyak’ problem. Our neighbors also feel discouraged to fill their tank in our shore.

4. Less pollution by (#1) reason.

5. More money for government to spend. Hope their spending benefits us the most.

That’s all that I could think in this short while. If you have any comment or suggestion, let me know through the comment section.

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  1. #1 by Syafiq on June 8, 2008 - 8:16 pm

    =Bagus la Irwan…boleh jadi Ketua Penerangan UMNO ni…

    • #2 by Irwan on June 9, 2008 - 7:55 pm

      haha, just giving my view from economic perspective.

  2. #3 by norisa on June 9, 2008 - 3:07 pm

    Hello everybody,I dont mind if the petrol price rising up but we have to bear in mind that this will be followed by increase of price- food, services and etc. How do Malaysians with low income and big family will survive these days, even myself my gross income around RM5900 (with 3 children + old parents to support) but still I can feel the pinch since my take-home-salary is getting smaller each day. I drive Atos 1.1 everyday(the only car) to go to work. Eat outside with family only once a month, the rest of the day I cook. I feel tired with some politicians saying that we should change our lifestyle as if we spend lavishly, but look who is spending lavishly? Anyway I’m glad that my children still can eat enough food and go to school (lucky enough the school is nearby). If my neighbours have beatiful lawn and garden full with flowers and landscape plant, I start growing my own food at my home backyard since January 2008 (the backyard size 10×40 feet of land) – grow vegetables and fruits, like spinach, peppers, tomatoes, okra, lime, water melon, tapioca, kangkong and many more. Now I’m satisfied I could save hundreds of ringgit per month by this effort and at the same time I can educate my children with organic edible gardening…So we as the middle income citizen is also struggling to survive in Malaysia these days…I dont think that RM5900 can be considered middle income anymore??!!

    • #4 by mike on June 19, 2008 - 11:56 am

      rm5900 and you find it hard?
      i think you could fair better as you are in the so called mid income bracket.

      let see… your net income should be around rm4838 per month.

      typically you pay rm250 for utilities & phone.
      an atoz & fuel will make you poorer by rm700
      rm400 for food,3 children can easily need around rm500. parent support rm250

      what do we get here. expense of rm2100
      so this is rough figure, and exclude your house finance.

      take home net is around rm2738 per month.
      it’s a lot by anybody’s standard. a decent house would probably cost a monthly rm1200 per month, hence you need to juggle rm1538. that’s more than one month gross salary of 25% of malaysian (nepalese & burmese are excluded :-))

      on top of what you are currently doing, i would suggest you explore the possibility to utilise the epf account 2. you may entitle yourself to not to pay for your house for 2 or 3 years. so this will cushion off your price hike, while hoping decent increment in the future to offset whatever hike bothering you now.

      don’t be silly saying epf for old days. what money is worth if you can’t use it.

      another thing, consider to avoid buying insurance policy other than yourself. a good one from MAA would cost around rm350 per month covering rm500k. (must i tell you this one can save you further in your yearly income tax under life insurance policy??)don’t be sentimental to have for your children’s education and all that. People sort of force us to buy all types of coverage by imparting fear to the worst thing that possibly happen. Yes, me too don’t want bad thing to happen. know this, what if not the worst thing happen eg retrenchment happened? you can’t pay the monthly premium, policy null & void, you end up pay a hefty sum for nothing.

      this is suggestion only (yes, it’s a valid ones!)

  3. #5 by goalcentre on June 9, 2008 - 5:52 pm

    After reading the post and replies, i guess most people are not feeling the pinch now. They are feeling the PUNCH!

  4. #6 by zaini on June 11, 2008 - 1:56 pm

    Salam,

    it is really shocking to hear those remark from you irwan – whom i looked upon to dearly. if that is your economic perspective view, then there is not that much that i can learned from you it seems.

    base on the soaring price of international oil price is such a ridicule act.why we need to take into account of neighboring town durian price when we grow our own – that can and should be evenly distributed to all our sons and daughters.

    1. encourage petrol reduction? – to the less capable or middle to low income resident i think. but how about all the menteris and what not. they have their claims and stuff. i dont even think they feel the pinch like the rest of us felt.

    2. benefit from rebate? – how is that so. let alone the fuel usage – govt rebate ratio, the rebate is only a one time process. it wont be given annually for god sake.

    3. i tend to agree but still the chances are there with the govt taken back their words in prohibiting outsiders from fueling out our gas.

    4. refer to #1

    5. again, i dont think such situation would occur by increasing the oil price. there so much reasons and what not. just bare in mind that Tun Razak create Petronas in order to maintain low price of petrol for Malaysian.

    * No heart feelings Irwan, i still love your post regarding personal financial management.

    p/s : just recently, even mufti perlis already made an open remark about these oil price hike drama regarding rebate matter thingy and the campaign of reducing our expenses. he told that it is against the religion for rulers to take the peoples valuables (in our terms, the extra price we had to pay) even for good causes such as protecting the countries from external threats without the rulers themselves cut cost to everything they own first – this including all those GLCs monies and stuff.

    * huh.such a lengthly comment. this is my first time commenting on your site btw. yippee.

    • #7 by Irwan on June 17, 2008 - 9:08 pm

      Salam Zaini,

      congratz on your first comment. My intention of writing in this blog is not to be admired or to be agreed with. Instead, I just want it to be my medium to convey my opinion and way of thinking. If my opinion is expected to be the same all the time with popular thinking, then I would better be at home sleeping, eating or watching movies perhaps. Given that you have taken serious effort to read and comment on my writing, I must say that it’s more than I had hoped. And I appreciate that. Really.

      Back to the article. I’m sorry that I didn’t explicitly type in the article that it’s purely economic point of view. Thus any political element should be minimized.

      first of all, about the durian analogy. I tend to agree with you except it’s not durian that we are talking about. It’s more like gold. Even if you give it to your children, the value is still there and now matter how cheap you sell it, the loss is still at the world price.

      The most disturbing about the giving is that roughly 10% of our subsidized fuel were smuggled by our neighbors. That accounts for a whopping 1.7 billion ringgit value. Our government can send two thousand more students oversea with that kind of money.

      Okay that maybe not what government will do. But the point is government has more money by doing this. What our lovely government is going to do with is a another story.

      I know it’s hard for people to accept good remarks from those who make them suffers, or at least it’s how it seems. And that’s also what I feel (just bought my first fuel after the hike). However, I respectfully request from those who read this article to think beyond the surface of this matter and put it in economic perspective which is how this article is meant to be read.

      sorry for late reply,

      regards,

      irwan

  5. #8 by Irwan on June 17, 2008 - 9:11 pm

    wow my reply is as long as the article itself. :p

    I don’t like my current theme btw 🙁

  6. #9 by zaini on June 17, 2008 - 10:29 pm

    hola.

    finally..heh..it is quite true from what u’ve been writing..it would be bollock to read thru and thru the same article all over the blogesphere and what not..heh..but isolating politics and economics?..hmm..

    nevertheless, i think the moment i wrote the comment is js being the after effect of what js happen to our beloved country..huh..everything seems to be kinda hicky, if u know wut im mean..i think i’m js being sour grape..heh

    thanks for the infos!

  7. #10 by (MFMS)d on June 18, 2008 - 6:02 pm

    I just dont agree about the hike in diesel about RM1 because once they raised, everything will follow. The sellers will take this as an opportunity to increase the price! Imagine before the hike, sayur they sell for RM1 per ikat, but now I need to pay for RM2 and worse, the quantity is no longer the same! What the hell?

    I know the situation that hits globally but our goverment must work hard to prevent this from happening. I think it is best to say to them to “Change your lifestyle”.. Please do your work!

  8. #11 by mike on June 19, 2008 - 12:14 pm

    hi all, let’s talk economy. will start with asset and liability. always make sure what you get is less than what you spend. else you’ll struggle. he2.

    i like to see thing in a positive & constructive manner.I am what i had control of the outcome. price hike? i can’t control that, but what are the things that i could do to overcome that? i commute by train instead of drive. I could spend 4 days family outing a month instead of 8. i can even buy smaller portion of fish/chicken/vege from now on. etc. A LOT OF THINGS can be done!!

    I dare not want to sacrifice life comfort, but i am willing to let go a bit (very little bit that is) so i can still can see things as rosy as before 🙂

    and i don’t want to be a “subsidised generation” forever. i wanna stand with my own two feet. anybody can do any bad things that they want bt i will still see things in positive light.

    see – all positive!! 🙂

    • #12 by mike on June 19, 2008 - 12:16 pm

      oppsiee… my bad, my bad.
      1st para – i meant to say, we must sped less than what we get. segal kesulitan amat dikesali…

  9. #13 by Lavern Milberger on November 9, 2010 - 4:02 am

    This blog seems to recieve a great deal of visitors. How do you advertise it? It gives a nice individual spin on things. I guess having something authentic or substantial to talk about is the most important factor.

  10. #14 by Ipannapi on January 5, 2011 - 11:48 pm

    in todays economy conditon
    where company have a lot of bad assets.. and have tnedancy to go bankrupt.. AIG, GOLDMANSACH, GM.. its a no-no.. this aply in malaysia too..
    bonds? before they default thier loans.. beter take ur money out.. lucky greece got germany to bail them..
    my money is on commodities all the way..

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