The Malaysian economy is expected to face tougher times following concerns that the United States may be heading for a double-dip recession. Malaysian Institute of Economic Research (MIER) executive director Datuk Dr Mohamed Ariff Abdul Kareem said all available evidence clearly showed that Malaysia was out of recession and the country would register positive growth in the fourth quarter of last year and that this would probably continue into 2010.

The rise in prices of goods and services is a major concern to all Malaysians especially those in the lower income bracket as well as business owners. We had more than a fair share of price increases in commodities in the last few years. Here are the main highlights of price hikes in that were implemented in the last few years.

May 26, 2007: Condensed Milk / The Tarik

Beverages containing condensed milk increased by 10 sen in Northern states

Malaysian Muslim Restaurant Operators Association president K.K. Sihabutheen said The rise in the price of condensed milk (RM108.85 per carton from RM99.85 a year ago) led to the price hike in Penang, Kedah and Perak. The price increase which was agreed upon by the association’s 150 was enforced at all major nasi kandar outlets in the northern states.

Sihabutheen said the price of roti canai and roti telur would remain at 60 sen and RM1.30 per piece despite the recent the increase in all-purpose wheat flour price. He also mentioned of price increases on other supplies like cooking gas (from RM82 to RM145 per 50kg tank), cooking oil (from RM33 to RM50 per 17kg tin), margarine (from RM2.20 to RM2.50 per kg), dhal (from RM1.80 to RM2.24 per kg) and spices (from RM1 to RM8 per kg).

Apr 13, 2008: Rice

Report on Escalation of Rice Prices

Sunday Star reported of the escalation of rice prices. The retail price of the lowest grade of local rice (with 15% broken pieces, the only grade with a controlled price) has risen to RM1.70 per kg from RM1.07 in 1996. Aeon companies (M) Bhd PR manager Shirly Chan confirms that on average, prices have risen gradually by as much as 20%, and by 10% in the last week alone.

An industry source says that the subsidised rice constitutes about 20-30% of the total amount of rice consumed in the country, but did not confirm if it was predominantly served on Malaysian dinner tables or used in rice-based products.

Jun 5, 2008: Fuel

Petrol price increased by 78 sen, 40.6 percent more from RM1.92 per litre to RM2.70
 
The government, under Datuk Seri Abdullah Ahmad Badawi’s administration end decades of heavy fuel subsidies and was adamant in its decision despite growing opposition and protests. Domestic trade minister at the time, Shahrir Samad, said the decision had been "wise" though he said the government was likely to absorb further increases.

 PAST PRICE HIKES ON FUEL

Source: Media Announcement

Heavy government subsidy have kept fuel prices in Malaysia among the lowest in Southeast Asia. Under its new system, owners of cars with smaller engines was to receive a rebate, while truck drivers will be given subsidised diesel to curb any inflationary consequences on the transport sector.

The price hike on fuel also resulted in up to 26% increase in electricity tariffs for some consumers in the following months.

Jul 9, 2008: Food and Beverages (Klang)

Indiscriminate Price Increase by food outlets in Klang

Klang consumers association (KCA) made a public complaint on the indiscriminate raising of price by operators of food outlets by 10 sen to RM2.80.

Aug 8, 2008: Cigarettes

Cigarette price increased by 60 sen

A pack of 20s increased form RM8.20 to RM8.80. Coincidentally, the new price complements the date of the implementation (08/08/08).

Feb 26, 2009: Tolls

Toll rate hikes deferred

Government announced an increase in toll rates of between 20 to 60 percent along five major highways in the Klang Valley to be in effect from March 1, 2009. PM Abdullah requested for the Works ministry to reconsider and a protest was held around KLCC prompting the deferment of the toll hike to an undisclosed date. Following the deferment, the government have to pay compensation in accordance with agreements between the government and the concession holders, estimated at RM287 million on that year.

Jul 24, 2009: Tolls

20% for Smart Tag and Touch and Go Users

PM Najib Tun Razak announced that Touch and Go and Smart Tag users who paid tolls 80 times or more per month would be given 20 percent discount from Sep 1 onwards.

Oct 1, 2009: Cigarettes

BAT increases price of 20s and later 14s

BAT (British American Tobacco) increased the prices of their 20-stick packs by 30 sen and 14-sick packs by 20 sen soon after. The price hike by BAT, which has 70 percent of the domestic cigarette market, was the result of the tobacco excise duty that was raised  1 sen (or 5.6 percent).

1 January, 2010: Cigarettes

Price of cheap cigarettes increased to RM6.40 per pack of 20s

Health Minister Datuk Seri Liow Tiong Lai announced on 27 December, 2009 that cigarette prices will be increased where the lowest price would be RM6.40 for a pack of 20s starting January 1, 2010. Liow said that “This was under the Tobacco Products Control Regulations gazetted by the ministry that will also see price promotions for cigarettes being prohibited. The new regulations would set the minimum retail price for a stick of cigarettes at 32sen.” Prior to this, a standard 20-stick pack of cigarettes costs RM9.30 with RM4.80 being the cheapest depending on the brand.

Jan 8, 2010: Food and Beverage

Public assured of halt on price hikes

Food and beverage manufacturers and restaurant operators associations nationwide promised they will not be a raise in their food and beverage prices following the sugar price increase. Domestic Trade, Cooperatives and consumerism Minister Datuk Seri Ismail Sabri Yaakob said this meant that the price of food like bread, cakes and condensed milk will not be raised.

What Looms Ahead

The way things has been going, escalation of prices on certain goods and services has become a matter of ‘when’ rather than ‘if’. On top of that, we have the introduction of GST to worry about. The government would definitely have to tread carefully in this matter if they are serious about winning the rakyat’s heart and regaining their much needed support and trust.

With the indiscriminate implementation of price hikes, average folks, especially the lower income and blue collars that make up the majority will have to resort to doing something else on the side for additional income. Having more and more workers forced to taking up extra work outside would affect their performance in their day jobs and an unhealthy chain effect would transpire where Key Performance Indicators (KPI) and Gross Domestic Product (GDP) would be impaired.

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