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Budget 2015: MRT Line 2 – RM23 Billion for savings in petrol subsidy by 2020?

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When there are more cars, the higher the petrol subsidy would be. How about there are more cars but there are less cars on the road on week days? As of today, it still sounds unlikely to me but we will see how the people would be persuaded to use MRT once it is ready instead of driving their cars everyday. The target for 2020 is to have public transport accounting for 50% of all travelling versus 25% by end 2015. Currently? It is at 21%. Do bear in mind that it was as high as 34% back in 1985. In other words, private vehicles has taken over because the public transportation has not kept up with the rate of urbanisation in Klang Valley.

With the inclusion of MRT Line 2 and assuming the 50% public transportation modal is achieved, it is possible that the subsidy for petrol alone might be capped at the same number as today. My rationale is that within 3 years, the fuel subsidy for every driver today would have been totally replaced by a more direct mechanism, a targeted one. Thus, I can already feel that drivers of cars with 1.6 litres like my wife, my brother, my sister and I may only receive half if any subsidy in the near future. As for drivers of small cars, the subsidy that they will receive does not need to be that high anyway. For example, Perodua Axia needs just 10 cent per km even based on today’s Ron 95 price. Yes, now you can se huge savings if you are driving a 1.0 litre car.

subsidyTherefore, the cost of MRT Line 2 of RM23 Billion is considered value-for-money kind of investment. What IF even after completion of MRT Line 1, majority of the people still choose to drive? I think they have to be ‘PERSUADED’ aggressively. Do not look too far, think along the lines of Singapore, a country majority of Malaysians said is a good role model. Right? Oh yeah, Singaporean drivers may be charged based on the km that they drive within the CBD within a few years time. Today, it’s the Electronic Road Pricing which will charge you everytime you pass any of the 80 ERP gantries. During peak hours, passing through 5 ERP gantries may cost you up to S$15. (RM40). Imagine driving to and fro and imagine 22 working days per month. Now do you know….

Actually, both my Personas are close to being fully paid already. I will most probably sell one and buy a 7 seater MPV for ease of travel when my parents are around. Another Persona may be changed to a smaller car, thus lowering my petrol consumption. As long as it is 5 Star Safety Rated, with ABS, EBD + min of 2 Airbags, I will go for it. Next year is the year. We shall see.

written on 11 Oct 2014

Next suggested article: TODAY newspaper of Singapore, comments from ‘experts’

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