Blog reader Sam Gopal has this to say:
You have been advocating strongly for a STRONG and WORLD CLASS public transport system. At this very time you are asking the Government to lower petrol prices. Lowering petrol prices will only make the public go back to using their cars even more. I think the push is for the Government to maintain a levy of petrol and then use this MONEY effectively to IMPROVE PUBLIC TRANSPORTATION system. Lets not jump into the bandwagon and simply oppose for the sake of opposing.
On the other hand LGE is making ludicrous demands of giving RM6,000 per family using PETRONAS money. Seriously, why can’t he talk about using this money to improve public infrastructure? The very thing China is doing, pumping in USD600 BILLION plus to improve infrastructure, and not handing out money to its citizens just like that, where ther is NO Return On Investment, except paying for more imports with this sort of money handed out.
To clarify, I am not advocating a total peg to the market price. So while a price of around RM1.50/litre might be the real market price price based on the current global market price for crude and the historical trend (as Penang CM Lim Guan Eng has suggested), it might not be prudent to use that price. A price reduction, yes (to provide immediate relief for people affected by the slowing economy), but not a total free float.
I believe in the long run, we need to tax fossil fuels, which are a polluting, non-renewable resource. This could take the form of a small levy to invest in renewable energy (solar, for instance), public transport and other conservation projects. Such a levy should accompany immediate significant improvements in public transport – but so far, all the past promises of improved public transport have not materialised. This levy must go into a special “green fund”, which must be carefully and transparently managed.
Only problem is I don’t think it’s possible to have such a transparently managed fund under this administration; if the fund is not managed properly, the money could so easily be squandered in dishing out inflated contracts to cronies, as we all know. It is risky to talk about pumping in billions into infrastructure when we know there are many “leakages” along the way. Public spending should be for the widest possible public benefit and not just to profit some big-time crony contractors.
At the same time, we cannot look at the petrol price in isolation as if it has no impact on the poor. Of course, the traditional argument is, why should we have petrol subsidies to subsidise those with fancy cars while many of the poor hardly use cars? We need to look closely at how the petrol price affects the price of food and realise that higher food prices will hurt the poor. We all saw what happened to the price of food when the petrol price was hiked 41 per cent. A small levy on petrol prices must also go hand-in-hand with improvements in food security.
Food security in this sense means taking steps to promote sustainable agriculture – not the agrichemical-driven model which has a close correlation with the price of oil. It would involve returning land or leasing state land to small farmers to increase self-sufficiency in food, possibly for each state. It shouldn’t be too difficult to allocate land for vegetable farms and orchards in each state, at the very least. If we can find land for golf courses, we can jolly well find land for sustainable agriculture. Also, bear in mind that many developed nations provide subsidies for their farmers.
Another part of the problem is that the large processed food and beverage companies (including the multinationals) rarely reduce their retail prices even when the prices of their ingredients and raw materials drop. Stock market investors regard these large companies as “recession proof” and they end up making huge profits. So why do we only focus on hawkers and nasi kandar vendors? What about the big food processing manufacturing firms? Do you see them reducing their retail prices? Consumers should seriously consider whether they want to persist in buying such products if the prices are not lowered accordingly.