In Kuala Lumpur

MALAYSIA'S government on Wednesday slashed the pump price of fuel by 6 per cent as part of efforts to ease inflation following the recent fall in global crude oil prices.

It was the biggest of three price cuts this year after the government raised fuel prices by a shocking 41 per cent just four months ago, in June, to stem the spiralling cost of fuel subsidies.

The decision to hike fuel prices was extremely unpopular, and it also resulted in higher electricity bills, transportation and food costs.

Inflation jumped to a 27-year high of 8.5 per cent in August, driven by the rising cost of food and fuel.
But since then, global crude oil prices have fallen sharply. And the government has adjusted pump prices accordingly.

Now comes the sad and bad news.

The moves to cut pump prices, which no doubt bring some cheer to the public, do not seem to be followed by similar cuts in the prices of goods and services by Malaysian businesses yet.

Quite a few Malaysians complain that their roti canai (roti prata in Singapore), teh tarik (milk tea) and daily staples are still exorbitantly high even after the cuts in pump prices.

Source: AFP

Based on anecdotal evidence, a bowl of claypot chicken rice at a KL office canteen for example, used to cost RM4.50 around a year ago. It now costs closer to RM6. Prices of such items appear to remain stubbornly higher at the moment despite the drop in fuel prices.

Even Tenaga Nasional, the state power distributor, has been urged to lower electricity charges in tandem with the drop in fuel prices.

Prime Minister Abdullah Badawi acknowledged the gap on Wednesday.

"This is not good. The prices of goods should come down accordingly," he said.

"The prices of goods went up when times were bad. But now that oil prices have been coming down, shopkeepers should be more responsible and reduce prices."

Instead of taking businesses to task or warning them of stern action, he placed the responsibility of lowering prices on the shoulders of consumers.

"The power of consumers is very strong. If they don't buy at high prices, then shopkeepers will not be able to sell their goods. But because people are still buying the goods even though they are expensive, shopkeepers will not bring down prices," he said.

This is easier said than done for ordinary Malaysians busy trying to make a living, with less money to spend and even less time to compare prices.

Not everyone has the time to go to several different supermarkets to figure out which one sells their regular brand of rice, tea or milk at the lowest price.

Some suggest that perhaps the government could help out by providing price comparisons by neighbourhoods.

At least one newspaper is already doing this, comparing the prices of fresh vegetables, fruit, meat, poultry and fish at various wet markets.

But perhaps there should be an official version from the government, and on a regular basis.

I am quite sure that the government will get lots of praise if it forms teams (officials or housewife volunteers?) to indicate weekly at least the prices of daily staples being sold at big supermarkets and wet markets, starting with the major cities.

Publish these in newspaper and websites.

This will force the supermarkets and shopkeepers to reduce prices because they now know that people can do actual comparison and drive to another place nearby.

That is surely better than yet another official asking consumers to act in concert to bring down food prices.