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Next month, the price of a 15kg tank of cooking gas will increase. Word on the street is that prices will go up by as much as RM10.00. Consumers will have to pay RM35.50 for a tank instead of the previous retail price of RM25.50. That’s a rather hefty 39% inflation! The price hike is in line with skyrocketing crude oil prices. World crude oil prices have hit an all time high of USD93.00 per barrel.

Even Tenaga Nasional Berhad (TNB), the local power company, has submitted a proposal to the government to increase the current electricity tariffs despite RM4.06bil in nett profits for the financial year ending 31 August 2007, up 88% from the previous year. The previous change in power tariffs was in early 2006 when electricity prices were increased by 12%. There’s yet to be a decision on the price increase.

Prices of noodles and other foodstuff made with enriched wheat flour have also increased. Bakers and noodle suppliers have been warned against blatantly increasing their price, but what can they do but to pass on the cost to the consumers. Hawkers have been given the green light to increase noodle based dishes from between 10 to 30 sen and many have already done so.

To top it all off, inflation is set to escalate further with the looming price hike of petroleum fuel. I suspect that the current prices of RM1.92 will be considered cheap compared to the new prices that have yet to be announced. If the increase of cooking gas can be taken as a yardstick, fuel prices may increase by as much as a dollar. The previous petrol hike was in 2005 when crude oil prices were at USD60+ per barrel. The current crude oil prices have increased by roughly 50%. I won’t be surprised if local petrol prices follow suit.

There is no way to avoid it. Petronas can no longer maintain the fuel subsidy and frankly speaking, they shouldn’t. While subsidies are all well and good, it provides a skewed view of the economy and a false sense of security. It would be better to slowly ease Malaysia into the real world instead of trying to buffer it from reality. The bubble will eventually burst.

Considering the steady inflation but low income and purchasing power, Malaysia is turning out to be an expensive place to live. It is increasingly tough to make a livelihood and get ahead.