On 16th July 2010, Malaysian government had announced a 5-in-1 price increase of the following goods:-

prices

The news broke out in the evening of 15th July and many motorists (including myself) were seen rushing to petrol stations to fill up their tanks before the increase at midnight 00:00 hrs. The price increase of petrol (RON 95 and 97) and diesel is RM0.05 per litre while LPG is RM0.10 per kilogramme and sugar is RM0.25 per kilogramme.

“The Government’s bold move to cut subsidies for sugar, petrol, diesel and liquefied petroleum gas will have minimal impact on individuals and families”, according to the prime minister Datuk Sri Najib.

I am very keen to know what is the impact on the price of a cup of “teh tarik” after the 5-in-1 increase for the above goods. According to newspapers report in Star on 16th July 2010, The Malaysian Muslim Restaurant Operators Association (Presma) will not raise prices of food and drinks despite the revision in the prices of sugar and fuel following subsidy cuts. It is good news for now and we should monitor and see in the next few weeks whether the prices will stay.

Yesterday, Pemudah put up full-page advertisement in all major newspapers to explain the subsidies cut in FAQ (frequently asked questions) format.

Impact on price of teh tarik

According to the Chart 4, the price increase of a glass of teh tarik (assuming an original price of RM1.00) will be increased by a mere RM0.003 (0.3 sen) based on the increase of fuel prices. If the price adjustment of 25 sen for sugar price is taken into consideration, the additional cost is 1.25 sen. Therefore the new teh tarik price will now be RM1.0155 (1.55 sen).

My two-cents

My own experience is that there is no price increase of teh tarik and roti canai yet in my favourite mamak stall and I believe it will remain for the time being. Dear all teh tarik kakis, if you ever encounter any shop selling teh tarik at an increased price, you should argue that the increase should be 1.55 sen!

Therefore the price of teh tarik should not be increased!

On a side note, there is definitely going to be some resentment especially among those in low-income group. As we know that Ramadan month cum Hari Raya Puasa, the month-long Hungry Ghost Festival, the Mid-Autumn or Mooncake Festival and the Kew Ong Yah Nine Emperor-Gods Festival are just around the corner Many Chinese also hold their weddings during the auspicious Mid-Autumn Festival period. Will the prices of food increase during these festivals?

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2 Comments on Should the price of teh tarik be increased after the subsidies cut?

  1. Geoff says:

    Mate, I wholeheartedly agree with you, especially when more & more people are actually asking for their Teh & Kopi to be made with LESS sugar, the prices shouldn’t go up yet.

  2. Nigel Chua says:

    Hahaha Geoff, agree with you. In fact, those who ask for less sugar should be given a 1.55 sen discount! Maybe can band up to form ten people so can get 15 sen off :p. But on a serious note, the subsidies should be removed (gradually) to decrease the dependence mindset of the population. It’s not healthy on the long term to keep subsidizing the people.

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