Not all is fine on Malaysia economy front. In fact, by 2011 Malaysia is expected to be a nett importer of oil. Currently Malaysia is a member Oil Producing Countries (OPEC) and have enjoy huge revenue from exporting oils. The main beneficiary of the oil boons is Petronas.
The disappointing facts are that, the oil reserve is getting less, the demand is ever rising and the government has no real plan to cushion the effect. The moment oil is imported, the prices of other goods and services will be skyrocketed, and government will also have less fund for subsidy. The prices of things now is related okay since Malaysia still export oil.
Relevant authorities are too slow in formulating plans for alternative energy to power the nation electricity demand as well as providing better and cheaper public transportation system.
* Malaysia will be broke soon because of subsidy
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Source: sun2surf.com/article.cfm?id=22314 (May 13, 2008)
Fleet card way to manage fuel subsidy
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GEORGE TOWN (May 13, 2008): The federal government is studying a mechanism that will help remove the blanket subsidy on fuel currently given to the Malaysian public by ensuring it reaches only the people who genuinely need it.
Studies are being conducted to formulate a nationwide system that allows the government to give subsidy based on the income of an individual.
Sources told theun that the authorities are looking into the option of implementing a fleet card system for vehicle owners from lower income groups.
Eligible citizens who hold the authorised card can fill their vehicles with subsidised fuel.
Higher income citizens would pay rates that more closely reflect market prices.
The move is seen as an initial step to gradually phase out altogether petrol subsidy that is now given to the general public - by first limiting aid only to certain income groups.
A fleet card system is seen as a more favourable mechanism that can ensure only financially deserving people get subsidy.
"The government wants to find a more efficient way to give subsidy to the right people," the source added. "Currently, subsidy is benefiting everybody, including the rich."
"The government wants to target subsidy to the right group and give the lower income people a choice."
Details of the scheme are being looked into by the Finance Ministry and the Domestic Trade and Consumer Affairs Ministry.
The fleet card system has been implemented nationwide before. In 2005, for example, commercial land transport operators were given the cards to get subsidised diesel.
The scheme was open to public transport vehicles registered under the Commercial Vehicles Licensing Board (CVLB).
The idea to restrict subsidy distribution for fuel is based on prevailing assumptions that subsidy is not in the long-term interest of the nation, as the spiraling global prices of crude oil has affected the government's ability to fund certain development projects.
Malaysia is expected to be a nett importer of oil by 2011.
The authorities however recognise that a reduction or abolition of subsidy is not practical now with the current food-price crisis. The fleet card system is considered a more practical option.
The government’s subsidy for petroleum for the general public in 2007 came up to RM16.181 billion.