I’ve always wondered if anyone who actually thought of starting a blog would need to look for a reason to take that step into expressing oneself to the wilderness of the net community. Look at me today, just doing my own things working away like how I do everyday in a marketing consulting firm and suddenly the news struck at approximately 2pm. It has been very busy lately which to common acknowledgement…is supposed to be a good thing.
However, what happened today to my country of Malaysia didn’t really hit me until I was close to wrapping up at work. News have swelled all over the nation that the price of a litre of oil will be increased from a mere RM1.92 to an economic paralyzing RM2.70 (78 cents / 40% increment). Diesel will increase by RM1 from RM1.58 to RM2.58 (64% increment) while electricity charges will increase by 18% for home users and 26% for business users.
The new prices have just came into effect 20 minutes ago, right after 12 midnight.
One word. Shocking.
Personally as a citizen, a fellow Malaysian, and also one who have always found interest in pondering about the economic effect of almost anything – I find this hard to swallow and comprehend. There are so many questions left unanswered. Normally I am one of those who would keep the critical questions to myself but today, my feelings go out to those who are considered low wage earners. Our Prime Minister only mentioned the price increase but left the explaining part under murky waters.
I am curious…why weren’t there a grace period? How are we supposed to be ready as citizens? As employees? As business owners? The grace period was essentially a matter of hours before the full effect of the new prices takes place. I know many people out there who earn anywhere from RM1000 to RM1500 per month. How are they supposed to survive? There weren’t even enough time for these people to brace themselves psychologically what more financially? Assume that on average Joe who earns RM1200 per month and spends approximately RM100 on fuel each week will now need to spend an RM140. That’s a RM40 increase PER WEEK. Here’s the math:
1 Week = RM40
1 Month = RM160
1 Year = RM1920
Putting the above into perspective, we can consider Joe taking a pay cut of 13.33% overnight. The scary part is that we have yet to take into consideration the electricity increment.
Of course, that is just a micro point of view. Let’s zoom out for a second and think about what will happen to the masses once this drop of news create its ripple effect. My primitive hunch can probably be summed up as follows:
Price of petrol increases by 40% > Prices of transportation and related industries will feel immediate shockwave > Sharp increase in prices of goods leading to inflation > Recession hits > Companies will start to contract and reduce investments and expansions to weather the storm out > Increase of unemployment > Increase of crime rate
I am very certain there are many unhappy people out there. I am actually more concerned for those who have to live each day making ends meet. This has got to be one painful slap to their faces. Nevermind the rebates, these people are living each day hanging on to a thin thread. By the time they receive the rebates, the damage will have already taken its toll.
I think I need some time to let this whole thing sink in.
Filed under: Economics, Governance, Life, Malaysia, Uncategorized | Tagged: Electricity, Gas, Governance, increase, Inflation, Malaysia, Oil, Petrol, Recession, Ringgit, ripple effect, RM, Unemployment
