Healthy competition to ease impact of price rises
Fuel price hikes lead to transport charge hikes; transport charge hikes lead to consumer goods price hikes; and consumer goods price hikes lead to seething discontentment. These are the phenomena that we have to face.
The problem is, the government must ensure that the price hikes are justified while making the greatest effort to stop unreasonable price rises.
Soong Phui Jee, mysinchew.com
Pan Malaysian Lorry Owners Association’s (PMLOA) announced a 15% increase in transportation charges to alleviate the burden and cost pressure of lorry operators. Land Public Transport Commission (SPAD), however, reminded lorry operators that the collective decision to increase transport charges by 15% might have violated the Competition Act 2010.
The Competition Act 2010 is meant to prohibit anti-competitive trading and activities, to ensure a healthy competition on price, improve the quality of goods and services, as well as provide more choices for consumers.
The country’s business community is still unfamiliar with the Competition Act 2010 and there are even many questions about it. Like the PMLOA, the common practice of many organisations is to announce a flat increasing rate after having internal negotiations. But such a move has now raised a question: Is a collective price rise a violation of the Competition Act?
The answer is yes, unless if the operators have obtained immunity under the Act.
Even so, the operators may still announce price rises respectively based on the needs of the free market. In such a way, they can then bypass the constraints of the Competition Act.
Any price hike measures could bring butterfly effect and affect people’s lives in varying degrees. Therefore, how great the impact of the recent fuel price and transport charge rises would be? Particularly when the value of ringgit is low, would it lead to another wave of inflation? The people are worried.
The people are equally concerned about how the government would use the money saved from fuel subsidy cut to expand the social safety net and reduce the impacts of fuel price hikes on low-income earners.
Meanwhile, members of the public should recognise the fact that there are great drawbacks in the existing fuel subsidy mechanism as everyone, regardless of rich or poor, can enjoy the same subsidy benefit. Consumers, particularly high-income earners, have then lost the reason to save. As a result, fuel consumption grows, as well as the government’s financial burden.
Today, the phasing out of fuel subsidy has been a decided policy and the people must face fuel price rises someday, if not today. In fact, if the fuel price rises were not halted because of the general election held in May this year, the government would have long adjusted the prices.
