Starting from 2nd October 2014, the price of petrol has gone up by RM0.20. The increase at RM0.20 on the current rate may seem small but may be a massive increase on your expenses. The price increase was made to decrease the federal government current account deficit-to-gross domestic product (GDP) ratio to 3% by 2015 as well as to consolidate its fiscal position.
The new price of RON95 petrol will be RM2.30 per litre from previously at RM2.10 while diesel will cost RM2.20 per litre from previously at RM2.00. The rise will subsequently lower the government’s subsidy amount by about 30% and support the ringgit currency at the same time. While the announcement of the additional price hike benefits the economic fundamentals, it will somehow affect the economy and the rakyat as a whole.
Fuel hikes definitely bring about a huge impact on the basic necessities and other consumer goods due to the fact that most goods need machineries and transportation which are fuelled by petrol. This will in turn affect the price increase in almost everything that involves a consumer’s daily routine. The purchasing power of consumers will also gradually be lower.
Despite only a twenty cents increase, the fuel price hike would be associated with a rise in the prices for raw and basic supplies like chicken, fish and vegetables. For example, the previous price hike in September last year leads to a reasonable increase ranging from 8 to 13% in the prices of fish. However, the reduction of the subsidy for RON95 petrol and diesel by 20 sen per litre does not mean that the traders are allowed to increase the prices of their goods irresponsibly. There is no doubt that the higher fuel price would result in the rise of transportation cost, but the impact on goods is still considered minimal.
With the rise in the cost of living, the recent fuel subsidy reduction undoubtedly impacts your financial situation. In order to counter the hikes, there are some alternatives which can be used as a solution to mitigate the impact of rising fuel prices. One of the effective ways to help you ease the burden of the current fuel hike is through the use of a petrol credit card. Being a petrol credit card holder, you are entitled to so many privileges in the form of additional rewards points, discounts and cashback such as cash rebates.
Apart from that, the government plans to control the smuggling of fuel and to ensure that the current subsidy is not misused. In order not to burden the lower income group, the implementation of the subsidy rationalization in stages will also be continued. This is in line with the government’s subsidy rationalization plan to make sure that the country’s finances remain strong.
Read More : http://myfinance.com.my/articles/detail/1016143141
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