The Perception of Iium Community Towards Gradual Removal of Fuel Subsidies in Malaysia
Perception of IIUM Community Towards Gradual Removal of Fuel Subsidy in Malaysia
Nur Nadhila Bt Mohd Robi
Bachelor of Accounting
Kulliyyah of Economics and Management Sciences
International Islamic University Malaysia, Gombak
English for Academic and Writing
LE 4000 Section 2
Lecturer: Madam Mona Mazlinda bt Mokhtar
5th December 2012
Abstract
Fuel subsidy is a portion of fuel price paid by the government to reduce the price burden on the consumers. Due to the rise in global market price and problems associated with the fuel subsidies, Malaysian government took an initiative to remove the fuel subsidy in a phased manner. However, its removal will adversely impact the society. This research paper is aimed to analyze the impacts of the gradual removal of the fuel subsidies and what the government can do to compensate for the loss of the fuel subsidy. Questionnaire was distributed to 30 respondents. Result show there seems to be an agreement that fuel subsidy should be gradually removed, but the removal must be accompanied by efficient policy implemented by the government. Public campaign to promote the understanding among the society could be the first step by the government to minimize the negative impacts on the society.
KEYWORDS: fuel subsidy, subsidy removal, gradual removal, impacts, compensation
Perception of IIUM Community Towards Gradual Removal of Fuel Subsidy in Malaysia
For decades, Malaysian government has been subsidizing the fuel prices to lift the burden of having to pay the rising market price of fuel by the Malaysian consumers. According to Will Hickey (2012), “Subsidies are essentially the government buying energy at market prices and reselling it back to citizens at lower prices” (p.1). It means that the government covers a portion of the fuel price paid by the Malaysian consumers. This action is to protect the consumers from the price hikes due to the rise in global market price. However, as the global market price is
Nur Nadhila Bt Mohd Robi
Bachelor of Accounting
Kulliyyah of Economics and Management Sciences
International Islamic University Malaysia, Gombak
English for Academic and Writing
LE 4000 Section 2
Lecturer: Madam Mona Mazlinda bt Mokhtar
5th December 2012
Abstract
Fuel subsidy is a portion of fuel price paid by the government to reduce the price burden on the consumers. Due to the rise in global market price and problems associated with the fuel subsidies, Malaysian government took an initiative to remove the fuel subsidy in a phased manner. However, its removal will adversely impact the society. This research paper is aimed to analyze the impacts of the gradual removal of the fuel subsidies and what the government can do to compensate for the loss of the fuel subsidy. Questionnaire was distributed to 30 respondents. Result show there seems to be an agreement that fuel subsidy should be gradually removed, but the removal must be accompanied by efficient policy implemented by the government. Public campaign to promote the understanding among the society could be the first step by the government to minimize the negative impacts on the society.
KEYWORDS: fuel subsidy, subsidy removal, gradual removal, impacts, compensation
Perception of IIUM Community Towards Gradual Removal of Fuel Subsidy in Malaysia
For decades, Malaysian government has been subsidizing the fuel prices to lift the burden of having to pay the rising market price of fuel by the Malaysian consumers. According to Will Hickey (2012), “Subsidies are essentially the government buying energy at market prices and reselling it back to citizens at lower prices” (p.1). It means that the government covers a portion of the fuel price paid by the Malaysian consumers. This action is to protect the consumers from the price hikes due to the rise in global market price. However, as the global market price is
References: Hickey, W. (2012, June 7). Time to End Fuel Subsidies? Retrieved from http://yaleglobal.yale.edu/content/time-end-fuel-subsidies Norasibah, M. J., Gairuzazmi, M. G., & Jarita, D. (2009). Oil Prices and the Malaysia Economy Bacon, R., & Kojima, M. (2006). Phasing Out Subsidies: Recent Experiences with Fuel in Developing Countrie. (Pg. 2-3) World Bank Group. Washington D. C. Ariff, M. (2009). Downsizing Fuel Subsidies (Pg. 1-2) Thillainathan, R. (2009). A Critical Review of Price Control & Subsidies. EKONOMIKA (Vol 1) (Pg. 5) Prime Minister Department (2005) Oil Prices and Subsidies An Explanation (Pg. 9)