To recap: The price of oil is skyrocketing, helped by increased demand, reduced supply, and a healthy level of speculation.

The government can no longer maintain existing subsidies and needs to find alternatives.

Fuel price increases are, or course, bad for everyone. Fuel price increases take money away from Malaysians.

At the same time, if the government continues to pay more and more money to subsidize petrol and passenger cars, it means less and less money is available for other economic and social needs.

We are all unprepared

This bad situation is about to get worse.

As I stated in the original writing of 'Brace Yourselves' yesterday, there was no way for the government to maintain current petrol prices without seriously hurting the economy.

And yet, if a price increase does take place, inflation and rising prices will seriously hurt the economy anyways.

But if the government had alternatives prepared, including public transportation and rail networks, things would be less painful. Moving people or cargo by rail is far cheaper and more efficient than we think.

The problem is that the government has not provided enough public transportation to deal with the hike in petrol.

There is no evidence that the government is prepared for the future of high priced oil or forecasting potential problems ahead.

Certainly the Sentul Batu Caves extension is already under construction and could open by the end of 2009. However, there has been no construction taking place on the vital Kota Damansara Cheras line. Or the less vital Subang Jaya and Puchong extensions.

Another vital line, the Puchong Gombak corridor, has been ignored.

In places where the infrastructure does exist, the companies are not going to be ready to meet the increased demand for public transportation.

The KTM Komuter system could operate six carriage trains at five minute frequencies. Unfortunately, KTM does not have enough trains to allow such operations, and can barely maintain the existing operations.

The RapidKL Kelana Jaya line will be expanded to four carriage operations, but these new trains will not arrive until 2009.

In addition, they will not be able to do much for a system that is already 40 percent over capacity.

Similarly, there have been no announcements about more trains for the Ampang LRT or KL Monorail line.

The reaction

We do not know when the government will increase petrol prices, but it will have to happen at some time.

The government is already talking about reducing the amount of subsidy of petrol, and even forcing people who own larger cars (who are assumed to be wealthier) to pay more for petrol.

There are also suggestions that people who purchase foreign cars (how unpatriotic of them) should be forced to pay more for petrol than those who own national cars.

Never mind that they are already paying huge amounts of money for duties and tariffs.

We also cannot forget about the Singaporeans, who can come to Malaysia and pay very low prices for their fuel.

There is also the gentle reminder that Malaysians are very good at "beating the system" and would probably find innovative ways avoiding higher petrol prices.

Whatever does happen, we know that when the petrol price increases, there will be immediate effects. Prices will rise for most consumer goods, and consumers will try to find ways to use less petrol.

There will be a huge increase in use of public transportation, as well as increased demand for smaller, more fuel efficient cars and motorcycles. More and more Malaysians will become aware of hybrid cars, which are only just entering the Malaysian market.

We will even see increased demand for bicycles and roller skates.

The fallout

Public transportation in Malaysia is still weak. Although RapidKL and RapidPenang are present (and making a difference), they are still in their infancy.

Most Malaysians would avoid public transportation if given the choice.

If demand for public transportation increases because of increased petrol prices, and if the operators and regulators are not prepared, then there will be chaos.

Buses and trains will be packed by commuters. Proper maintenance will be deferred in order to keep train services moving.

In 2006 and 2007, increased passenger demands caused significant problems for KTM and RapidKL and the KL Monorail. Will we see a repeat of the same problems in 2008?

Is it too late to ease the pain?

Originally, this article was meant to be a warning for public transport operators, the government, and commuters.

That warning still holds. It is too late to ease the pain that we will feel in the short term. However, there are still things that the government can do to ease the pain in the long term.

What the government must do is to revamp the public transportation system throughout the country, in order to prepare for the future of high oil prices.

Malaysians need an alternative to their dependency on the car.

To begin with, the government must create a National Public Transportation Department and formulate a National Public Transportation Strategy and determine the funding needed to create proper transportation networks throughout the country.

This strategy and funding would then be applied to different economic regions throughout Malaysia.

The government has already identified some of these economic regions with its ambitious development plans. There are, for example, the Northern Corridor Economic Region (NCER), East Coast Economic Region (ECER), and Iskandar Development Region (IDR), as well as separate development regions for Sabah and Sarawak.

We also cannot forget other economic regions, such as the Greater Klang Valley region, Melaka region, and the Kinta Valley region.

It would be a relatively simple matter to create regional transportation authorities for each of these economic regions. Each regional transportation authority would plan routes and fares, and offer these routes to private operators who would compete to operate services on these routes.

With this system of government regulated competition, passengers would benefit the most.

Public transportation services would become more convenient and reliable, and more and more people would be willing to use public transportation.

Increased demand would lead to increased revenue, which would allow expanded services and lower fares.

This system has worked successfully in many parts of the world and would work successfully in Malaysia.

Why haven't we learn?

When a household is facing increased expenses, and no increase in wages, they must economize and cut costs. When a business is seeing increased costs and no increase in revenues, they must economize and cut costs.

The same holds true for governments.

Of course, we do not want to government to stop investing in the economy. However, the government must invest in the right areas, to bring maximum benefit to the economy and to Malaysian society.

In the case of public transportation, maximum benefits will come from creating complete, comprehensive, reliable public transportation networks throughout the country. As stated before the focus should not be on mass transit. It should be on transit for the masses.

I do not think that the government has recognized this yet, but I have hopes.

The government will recognize the need of public transit for the masses, as opposed to mass transit projects. In the short term, Malaysians will still feel pain as prices increase. This pain will be felt in the pocketbooks of families throughout the country.

But maybe, just maybe, things will be better in the long term. Malaysians are generally positive people.

If the government makes these necessary changes now and really invests in public transportation, all Malaysians will one day have real choices and alternatives to the private car.