Media Statement
by Political Secretary to DAP Secretary General and DAPSY (Youth) Acting National Secretary, Loke Siew Fook
on Wednesday, 31^st July 2002
in Petaling Jaya

Increase of fuel prices will cause serious inflation and burden consumers

 The announcement by Domestic Trade and Consumer Affairs Minister Tan Sri Muhyiddin Yassin that the government will reduce the subsidies for fuels in stages will cause fuel prices to go up for the third time in less than one year time. The price of petrol was raised 10 cents a liter in October last year after the announcement of the 2002 Budget and further increased by 2 cents from 1^st May this year.

 The increase was a remarkable 10% hike from the old price of RM1.20 per liter to the current price of RM1.32 per liter for the unleaded petrol, which is commonly used by car users. The 10% increase in a timeframe of 7 months is already causing huge burdens to consumers. The increase in fuel prices had caused direct impact to vehicle users who have to spend extra 10% on their monthly travel expenses. It also has indirect consequences like causing higher operating cost for factories, enterprises and businesses particularly those related to transportation industries. 

The government must realize that allowing the increase of fuel prices will create two- prong negative impacts. Firstly, it will cost more for car users and this will definitely affect a large section of the consumers, as a big population of Malaysian society owns a car. Furthermore, the price hike in fuel will have cascading effects and lead to increase of prices of other goods and services and thus contributing to inflation in our economy. 

Secondly, the higher cost of fuel will increase the overall operating cost of doing business in Malaysia. The government must realize that in the wake of preparing to open our economy to face the AFTA (Asean Free Trade Area) in 2005 and the increasing economic threat from China, we must be remained competitive in the eyes of foreign investors. The increase in fuel prices and other utilities such as water and electricity will not go down well for the business community particularly the Small and Medium Industries who is increasingly facing challenges and competition in the marketplace. 

Although the Minister said that no time frame has been fixed for the price hike, nevertheless the decision to raise the price is definite according to the Ministry. DAP calls upon all SMI Associations, Trade and Business Associations, consumer groups and other related bodies and organizations to come forward to voice their objections to the fuel prices hike together with the DAP for the common interest of the people and the country.  DAP is prepared to have dialogues with any interest groups and take a common stand on this issue which will have affect our day-to-day life as well as the competitiveness of our economy in the global market.