PAS warns Putrajaya of inflation spike from fuel price hike

KUALA LUMPUR, Sept 3 — PAS information chief Tuan Ibrahim Tuan Man warned the Barisan Nasional (BN) government today that raising fuel prices when the global economy is uncertain could harm the country and cause citizens to pay more for goods and services.

Putrajaya needed to do all in its power to contain the inflation that will result, he said, despite its assurance of a limited fallout.

“It is easy for Prime Minister Datuk Seri Najib Razak to say that inflation is under control but the fact is the value of the ringgit is plummeting and the political situation in the Middle East is not stable.

“Is BN, especially Najib, certain that inflation will remain steady despite the fuel price hike?” said Tuan Ibrahim in a statement today.

Pointing to the effects of the previous Abdullah administration’s move to slash fuel subsidies sharply in 2008, Tuan Ibrahim said a failure to mitigate inflation would lead to a permanent increase in the price of goods,

“He made the cost of goods and the cost of living rise dramatically, and even until now it has remained at that level, even though the fuel price has been lowered to RM1.90,” said Tuan Ibrahim, referring to former prime minister Tun Abdullah Ahmad Badawi.

Tuan Ibrahim also dismissed Najib’s plan to increase the cash hand-outs for the poor following the subsidy cut, saying the promised increase in the 1 Malaysia People’s Aid (BR1M) cash hand-outs were insufficient to counter the rise in prices that will follow.

“If the BR1M is paid out at a maximum rate of RM1,200 for a year, it is only RM100 a month. The people know how little the value of RM100 is these days, especially when all the prices of goods are increasing due to increasing import rates, while the value of the ringgit is shrinking and the fuel prices are rising,” he added.

Yesterday, Najib, who is also finance minister, announced a 20 sen increase to the pump prices of RON95 petrol and diesel, raising them to RM2.10 and RM2 a litre respectively beginning today, to help slash the nation’s subsidy bill and trim the budget deficit.