Lab proposes an increase of 10 sen every six months until 2014

The Star Online, Friday 28,2010

KUALA LUMPUR: Fuel prices could increase as soon as next month if a proposal by the Subsidy Rationalisation Lab is to be implemented.

The lab, organised by Performance Manage­ment and Delivery Unit, recommended that fuel price be increased by 10 sen to 15 sen by the middle of the year to help realise the Government’s plan to cut its subsidy bill.

Following the initial increase, the lab proposed an increase of 10 sen every six months until 2014, by which time the level is expected to have reached market price.

To help mitigate the effects of the price hike, owners of cars with an engine capacity below 1,000cc will get a cash rebate of RM126 per year.

Owners of motorcycles below 250cc will get a rebate of RM54 a year.

Using this formula, the Government will save RM44.9bil in five years.

According to a simulation conducted by the lab, the impact of the price hike would be minimal.

It found that the diesel price hike of 15% or 21 sen would result in express bus fares increasing by one sen to 1.5 sen a kilometre.

The same quantum of increase would raise stage bus fares by 1.4 sen to 50 sen a kilometre, and school bus fares by one sen to 58 sen a kilometre.

For cooking gas or liquefied petroleum gas, the lab proposed a 10% increase by the middle of the year, followed by a 20% increase every year.

The lab projected that an increase of 15% in the price of gas would raise prices of food such as roti canai, nasi lemak, teh tarik and mee goreng by only one to four sen.

On healthcare, the lab proposed that the charge for outpatient treatment at public clinics and hospitals be increased from RM1 to RM3.

For in-patient treatment, the cost will be doubled to RM160 for Class One wards, RM40 (Class Two) and RM6 (Class Three).

Those whose household income is under RM2,160 or categorised under the Fees Act will still enjoy fee exemption.

It also proposed that from 2013, patients pay a percentage of their in-patient cost instead of the current flat rate, and from 2015, patients are to pay a percentage of their outpatient treatment and medication.