The true cost of living

Subsidies have been slowly curbed and come Dec 1, the Government is scrapping the RON95 fuel subsidy, allowing prices to be based on a managed float system and better reflecting market rates.

IT’S hard for the average Malaysian wage earner to understand why the cost of living has risen when the rest of the world is seeing lower inflation given that global oil prices are trading below US$80 a barrel.

Simply put, people have gotten used to unrealistically low prices due to Malaysia’s subsidies regime covering fuel, basic necessities and electricity. This regime has distorted market pricing.