Crafty Consumer: The positive outcome of eliminating fuel subsidies in Malaysia

The consumers are resigned to the fact that their cost of living is going up. The amount of complaints and cry for help being heard now seems to suggest that Malaysians are predominantly pessimistic. Is this true? Should they be this way?

This morning, on FLY FM, the radio station, they were trying to get people with negative experiences to call up and share it with radio listeners. In turn, the DJs will try to spin a positive aspect of that experience back to the caller. This got me thinking about the possible positives that could come out from the elimination of the fuel subsidies.

Let us take for an example a family of 4. Working parents and 2 school going children. Prior to the change in fuel prices, this family uses 2 cars to commute to work. The children attend school close to their house and therefore use school bus to commute. The weekly expense for fuel is typically RM100 per car.

With the change in the fuel price the family will now have to spend an additional RM40.63 of fuel per car or RM281.26 compared to just RM200.00 previously. How to reduce this? Easy, just use one car to commute to work! This would mean this particular family will only spend RM140.63 per week on fuel. Compare this to pre-fuel hike times; there is still a savings of RM59.37. In a month, the savings will be RM237.48.

This example shows us one thing, by improving our efficiency and changing our daily routine, we can still save money! Yes, by using just one car would mean sacrifices but at least it forces people to keep to schedules.

Let us now assume that this family goes out for a meal at a nice restaurant once a week. Average spending at a restaurant is RM160.00. This means, in a month, this family spends RM640.00. To save money and create a good family bonding session, this family can still cook a feast. For example, if they buy a 2 kg steak from the market, it will cost them about RM46.00. Plus a premium ice-cream, say RM20.00 per pint and adding another RM20.00 of the other ingredients, total cost of such a dinner is only RM86.00. Do this twice a month and the savings to the family is RM148.

By just by this two simple changes in a family’s routine, the family will be able to save RM385.48 per month. See how easy it is to save.