Thursday, June 2, 2011

Minimal Impact? You Must Be Kidding Sir!

The Government has done it again!

Effective 1st June 2011, the electricity tariff has been increased by 7% from 31.31sen/kWh to 33.54/kWh. According to the Ministry involved, the increased will not result in a massive inflation. FYI, current inflation rate for Malaysia is officially reported at 3.5%. The Minister also added that the increase will not impact 85% of the consumers whose monthly average usage of electricity is below the threshold line. This tariff increase will mainly impact the commercial sector. So, excuse me Sir?! What do you mean consumers will not be impacted. Do u mean that the business sector will quietly absorb the cost of the tariff increase? You think every businessman out there will sit down quietly and absorb their increased operating cost? Surely they will pass down the cost to the consumers. I am sure that restaurant operators will dish out a smaller servings for the same price or increase the selling price to cover the cost.

Already, the Malaysian Retailer-Chains Association has indicated retailers may have to pass on to consumers part of the additional costs incurred following the tariff hike. In computing the price increase, I am sure that businesses like hawker or mamak will increase food price by a fixed amount. Who says a 7% increase in electricity has minimal impact. Can you imagine everything you buy, somewhere or another is produced by something which uses electricity before the final product is served/sold to you? Everyone knows how to “justify” him/herself when a raise is needed. You will just be wasting your energy arguing that the product that you buy does not use energy from raw material to semi-finished goods to finished goods.

A few days ago, a colleague of mine related to me an incident he had at a mamak stall. Many moons ago, the local Ministry announced the price increase of sugar. This was in line with global price increase and to encourage Malaysians to consume less sugar. My colleague went to a Mamak stall and ordered a less sugar tea. When the bill came, he was being charged for the same price as a regular cup of tea. When my colleague asked shouldn’t he be charged a cheaper cup of tea since he ordered a less sugar? The waiter just smiled and said other operating cost has increased like gas etc. “So, sorry Sir, your tea cost as much as the rest”.

So, when someone open his/her mouth, especially someone who holds a Govermental position tells us there is “Minimal Impact”, I think you must be kidding Sir!

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