As Oil Prices Continue To Soar…

We start to ponder what the Singapore government can do to ameliorate the situation for all locals alike.

China recently joined in the fray to jack up its oil prices, while global oil prices press near USD140 per barrel even as Saudi Arabia has promised to increase output. With all these recent happenings, the prospect of oil prices actually taking a dip looks bleak at the moment.

On the downside, the elevated oil prices have also translated into rising food prices and electricity bills. This is especially evident should one decide to take a walk down the aisles of supermarkets and food courts (especially the latter, with the new prices, under makeshift signage, taking precedence over the old. Some nasi padang stores have also gone so far as to charging $2.00 for a portion of assam fish)

The resounding calls for a cut in petrol taxes are growing louder as an interim measure, but the government has stood firm in its resolution that cutting petrol duties and giving out subsidies are not the answer to soaring global oil prices.

But are subsidies the way to go to ease the situation? Minister Mah Bow Tan has mentioned that even countries such as China and Malaysia have started to re-think their policies on this. In the meantime, nations such as Indonesia and the Philippines are now in trouble due to subsidies.

In any case, not everyone can be pleased. One thing is for sure, though, that Singaporeans, unlike its neighbouring counterparts in Malaysia and Indonesia, are not renowned for being loud-mouthed in protests or demonstrations against government policies. Worst come to worst, bad policies will rankle throughout the state at first, before local citizens come to terms with them. Hence, in my humble opinion, such rationalizing against giving subsidies is in a sense, rather flawed.

Instead of subsidies, one interim measure, I suppose, the local government could possibly consider an increase in the GST Offset Package and Growth Dividends payments which was introduced during its 2007 Budget in subsequent years, to ameliorate the situation for citizens. This will leave the onus with local citizens to find ways and means to adapt to the rising cost of living themselves.

Also, it remains true that cutting the duty of about 40 cents for every litre of petrol will definitely send wrong signals to consumers about the real prices of oil. In any case, lifestyle habits have to be changed to increase the sustainability of our natural resources and to prevent oil prices for surging through the roof any further. For instance, turning off lights and air-conditioning at home when not in use, or by using public transport more frequently, are some plausible courses of action to take, for the good of the future. To promote environmental conversation, MediaCorp’s “Saving Gaia” is back for its second year as well.

It will certainly take a collective effort of not only the Government, but individuals themselves to tide over this pressing crisis.