The petrol prices has been raising, and in response to the calls for cut in petrol taxes, Minister Mah explained that cutting the duty of about 40 cents for every litre of petrol would send the wrong signal to consumers about the REAL PRICE of oil.

Hmm. Price can be defined as the amount of money asked for or given in exchange of something, while tax can be defined as a sum of money demanded by a government for its support for specific facilities or services. So, in a sense, taxes goes into the government overall “budget” for maintaining of public facilities or services. It is different from the price of goods that is set by the seller. Pwd? =)

THE calls for a cut in petrol taxes continue to grow louder, but the answer from the Government remains the same.
Cutting petrol duties and giving out subsidies are not the answer to soaring global oil prices.

Instead, National Development Minister Mah Bow Tan suggested modifying lifestyles to cut household energy bills.

Urging against subsidies, he said that even countries like China and Malaysia have started to re-think their policies on this.

Global oil prices recently soared to new highs of close to US$140 per barrel compared to US$40 per barrel in 2004. This year alone, crude prices have risen some 40 per cent.

The fresh calls for tax cuts here came this time from Tampines East residents during a dialogue with Mr Mah on Saturday.

He explained that cutting the duty of about 40 cents for every litre of petrol would send the wrong signal to consumers about the real price of oil.

‘Subsidising oil will not be right as it would encourage consumers to use more oil, which would drive up the price even more.

‘We want to make sure that we pay the correct price for oil and tackle the problem in a sustainable way.’

This involves changing lifestyles and habits by car pooling, using public transport, or just turning off lights and air-conditioning at home when not needed.

Article obtained from straitstimes.com on 21th June 2008



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