Price Hikes We Dread In 2016
The year 2015 was certainly not an easy one for Malaysians, from having to adjust to fuel subsidy removals starting December 2014, to having to cope with price hikes that came with the implementation of the 6% Goods and Services Tax (GST) in April, to having to weather the weakening Ringgit, which hit a 17-year-low against the US dollar (at 4.40) in September due to falling crude oil prices.
To top it up, tolls at highways operated by 11 concessionaires were also raised by between 20 sen and RM3 in October.
Will the upcoming year spell better news for our wallets? We are not counting on it. In fact, there will be further all-round price increments that we are totally not looking forward to. What are they? Read on to find out.
More expensive trips via KLIA Express
It’s no secret by now, that your journey to KLIA and KLIA 2 via the KLIA Ekspres will cost RM55 starting January 1 – that’s a staggering 57% increase from the existing RM35 rate!
Rail operator Express Rail Link Sdn Bhd (ERL) defended the rate increase by saying that the rate has not been revised since 2002, and the increased fare is already a discounted version of the original approved new fare of RM64.
The fare increments was according to the concession agreement, which allowed the company to increase the price up to RM64, and has been approved by the government.
More toll hikes (possibly)
According to Works Minister Datuk Fadillah Yusof, eight highways are entitled to increase toll rates in 2016.
“I’m not deciding on whether there will be an increase or not. Those entitled to receive hikes for 2016 are eight highways,” Datuk Fadillah told Parliament in November.
The highways with their respective entitled compensations are:
- North-South Expressway (RM214 million)
- Second Link Expressway (RM8.24 million)
- ELITE Highway (RM79.44 million)
- Butterworth-Kulim Expressway (RM3.11 million)
- Seremban-Port Dickson Highway (RM1.95 million)
- KESAS Highway (RM92.8 million)
- LDP (RM185.89 million)
- North Klang Straits Bypass Expressway (RM7.85 million)
However, Datuk Fadillah did mention that the government has already allocated RM593.32 million to compensate the highway concessionaires, in the event they are not allowed to hike their rates.
In any case, we are keeping our fingers crossed.
We are not surprised. With the Ringgit depreciating by 20% year-to-date against the US dollar, UMW announced that they would increase the prices of all its Toyota and Lexus vehicles by 4% to 16% effective January 2016, due to the weakened currency.
This is because UMW’s overall cost of production has increased. The fluctuation of the Ringgit has impacted their business as some of their parts and components are imported.
Proton Holdings Bhd is also considering raising the prices of its vehicles from 2016. According to Proton, many raw materials are purchased in foreign currency. The weaker Ringgit affects the company’s operation cost and the entire eco-system chain, including vendors.
Meanwhile, Perodua announced it may increase the selling price of its car models if the Ringgit continues to depreciate. Although 90% of its components are built locally, Perodua imports the remaining 10% of automotive parts from overseas, which most of them paid in US dollar.
Higher electricity bill
Power tariff rebate for peninsular Malaysia will be slashed in 2016, and this will see consumers paying 0.73 sen more per kilowatt hour (kWh) for the first six months of next year.
The rebate in the peninsula would be reduced from 2.25 sen/kWh to 1.52 sen/kWh. However, Energy, Green Technology and Water Minister Datuk Seri Dr Maximus Ongkili said the rebate for Sabah and Labuan will remain the same at 1.20 sen/kWh.
Base electricity tariffs overall will remain the same as the current period, at an average of 38.53 sen/kWh for the peninsula and 33.32 sen/kWh for Sabah and Labuan.
To find out how much more you could be paying for electricity in 2016, click here.
More expensive dining out
The RM950 million cooking oil price stabilisation scheme was completely removed under Budget 2016. The scheme, introduced in 2007, ensured a ceiling price on cooking oil and sufficient supply in the market.
With it effectively abolished next year, it means that consumers will likely have to fork out more for cooking oil. The current market price for a 5kg cooking oil is between RM15 – RM50. The palm oil ones are the cheapest while the corn oil ones are the most expensive.
Obviously, with more expensive cooking oil, comes more expensive meals in restaurants and eateries everywhere. This is because the cost of production will increase with the higher price of cooking oil.
Ultimately, consumers will have to bear the brunt of the price increments and this could very well lead to a further rise in the cost of living for many city dwellers, whose only resort sometimes is to eat out.
Already, the escalating cost of living have caused worries for Malaysians, especially in times of economic uncertainties. The further price hikes in 2016 will no doubt add to the financial burden of many.
This is why upping our game in personal finance management is so important. In these volatile times, we can no longer rely solely on our pay cheque. We now have to seek out new avenues to grow and sustain our wealth. Unit trusts, bonds and fixed deposits are just a few ways that we can guard our capital against the effects of inflation.
Meanwhile, you can stretch your Ringgit further using a credit card that complements your lifestyle and spending habits.