My Longkang

I received the following through e-mail. Interesting food for thought. I have taken the liberty to edit it a little before publishing so as not to ruffle any feathers.

1.A large number of people cannot afford motorcycles and small cars and take buses to go to work. When petrol price increases, it is a foregone conclusion that the bus owners will increase the fares. Instead of helping the poor, this category of people will be hit by a double whammy – increased bus fares and increase in prices of food, goods and services and everything else!

2.A new small car costs much more than a second hand car. For example, a small new 850cc Kancil cost $27,000 can carry about 4 persons albeit with some difficulty but a second hand 2500cc Volvo 850 costs about $15,000 could carry goods and 5-6 people easily without problem. In fact, we do find a lot of poor kampong folks driving big, old but cheap continental cars/vans/jeeps because it is more suitable for carrying farm produce as well as for transporting their large families. Again they will be hit by a double whammy- increase in price of petrol and everything else!

3.In a poor family of 10 people, only one can afford a small car which is used to make 2 trips to transport everybody. Only one will receive a small petrol payment (for one trip) and the other 9 members will have to bear the increased prices of petrol (for 2nd trip), food and everything else.

4.The huge increase in price of petrol will cause a chain reaction on the increase in prices of other goods and services. Whatever small amounts received by the motorcyclist and small car owners will be largely negated by the more than disproportionate increase in prices of goods and services.

5.Equate rich or poor with the cc of the vehicles? An average office clerk may own a second hand 1300cc proton Iswara costing $7000 (rebate = $625) while the Robert Kuok’s children can own a fleet of 10 new cars of BMW, Audi and Volvo all less than 2000cc costing $2 millions and
get a total rebate of $625 x 10 = $6,250!

6.In Malaysia, the heavier burden is caused by cost of traveling to work. The cost of traveling will have to include:

1. toll charges,
2. amortisation of the vehicle’s cost over the economic useful life of the
vehicle, or, for those who have obtained loan financing, the monthly loan
repayments,
3. the annual vehicle maintenance cost (tyres, brake pads, engine oil, spark
plugs, etc)
4. road tax,
5. parking; and
6. petrol

If you analyze above carefully a huge chunk of the expenses goes to car amortization cost and toll charges. Everyone who has traveled overseas knows for a fact that Malaysia has one of the highest numbers of tolls in the country and very high excise duties on cars.

Take a real life example of a typical average worker in Malaysia earning a take home pay after deducting EPF of RM 2,000 a month. He drives a small 850cc Kancil (cost RM27,000) and travels to and from work each day from his home in Cheras averaging about 40 km. His typical monthly travelling cost is:

Amortization of car for 10 years ($27,000/10/12)………….$225
Petrol (based on current price)……………………………………$200
Maintenance of car…………………………………………… ….……..$100
Road Tax ($50/ 12)…………………………………………… ……………….$4
Parking ……………………………………………… ………….………………$90
Total Travelling Cost per Month……………………………………$619
Percentage of Travelling Cost to Take-Home Pay…………31%

It simply does not make sense that the use of vehicle for traveling to work to earn revenue for the country would be a whopping 31% of his take home pay for a country that is a net exporter of oil.

That does not even include his payment for the increased price of petrol and monthly expenditure for food, housing loan, medical expenses, children schooling expenses, etc, which are certain to increase if the prices of petrol increase.

Does it make sense to make a small amount of cash repayments to a small portion of the citizens but the cost of tolls, utilities, food, goods and services keep on escalating. Not all registered owners are the actual users of the vehicle and how will the repayments go to the actual persons intended?

This way of abrupt petrol price increase would be disastrous to the nation and once the negative chain reactions (stock market slow down, run away inflation, economic slowdown, corporate under-budgets, etc) happen, the nation might not recover from it for a long time.

We just cannot compare the petrol price with selective non-oil producing countries without taking into consideration the related traveling cost and the cost of living!

* Logic will tell you that a fisherman cannot have a same cost of fish as
his neighbour who is a farmer!

I do not know the original writer but I would be the first to quote the writer if given the information.