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Distributing Petronas Profits To Malaysians And Removing Fuel Subsidies Are The Most Efficient, Cost-Effective And Competitive Solution To Reduce The Financial Burden To The Country And 25 Million Malaysians.

 

 


Media Statement
by Lim Guan Eng


(Petaling Jaya, Friday): DAP proposes that putting the people first should be the main priority and responsibility of the government in managing the fuel crisis caused by escalating international price of crude oil increasing to a record-high US$74 (RM270) a barrel. As such distributing petronas profits to Malaysians and removing fuel subsidies are the most efficient, cost-effective and competitive solution to reduce the financial burden to the country and 25 million Malaysians.

The record-high prices means that the RM4.4 billion savings in fuel subsidy had almost been wiped out since Feb 27 when fuel prices shot up by 30 sen. Second Finance Minister Tan Sri Nor Mohamed Yakcop said the latest increase in the price of crude oil would cost the Government about RM3.5 billion in subsidies. This means the Governmentís savings from the increase in fuel prices earlier this year amounted to about RM900 million.

 

What type of improvement or upgrading of the public transportation system can be carried with only RM 900 million as compared to.RM4.4 billion in fuel subsidies savings promised? Worse is that there would not be much development projects to benefit the people from the fuel subsidies savings when it is only RM 900 million and not RM 4.4 billion. Sarawak had asked for 10% of the RM4.4bil saved through reduced fuel subsidies to help people in the state who need help to pay for petrol and diesel.

 

If this amount is now RM 900 million, would RM 90 million be sufficient for Sarawak as well as how this is to be distributed to other states. For how long then, can Prime Minister Datuk Seri Abdullah Ahmad Badawi maintain his promise that there would be no more increase in the price of petrol this year should petrol prices hit US$80-US$100 per barrel? Or would there be another massive increase on 1 January 2007?

 

The time has come for the government to adopt a new approach that allows the government to save money, be more efficient, cut down wastage and losses due to rampant smuggling and corruption as well as reduce then financial burden of the people. Failure to stop the smuggling of cheaper diesel to neighbouring countries and action against those responsible for causing smuggling losses of RM 1.6 billion, 10% of the RM 16 billion annual fuel subsidies.

 

The abuse of fishermen diesel subsidy at RM 1 per liter of diesel has reached alarming proportion. Such diesel subsidy for fishermen rose sharply from 326 million liters in 2002 to 1.2 billion liters in 2005. However the amount of fish caught actually declined from 1.29 million metric tones in 2002 to 1.2 million metric tones in 2005.

 

It is unlikely that fishermen are the real culprits as they would be unable to be approved so much diesel unless they can prove it with the amount of fish caught. The most likely suspects are officials from the relevant Ministry who approved the supply of diesel to go up by nearly 900 million liters from 326 million liters to 1.2 million liters. At an average difference of 30 cents from the market price, the country has lost nearly RM 300 million to those connected to the Ministry who abuse the diesel subsidy.

 

Such abuses can be overcome by removing subsidies. However to minimize the social cost the financial burden of poor Malaysians, the government has a moral obligation to distribute Petronas profits to needy Malaysians as such oil revenue belong to Malaysians. For 2004, RM 35.5 billion in Petronas profits would amount to RM 1,500 per person or RM 9,000 per year for a needy household of 6 persons. For the latest financial year, Petronas profits would amount to RM 2,000 ringgit per needy Malaysians who are not well-off, more than enough to offset the rise in petrol price at international prices.

 

If a non-oil exporter like Singapore can give S$2.6 billion (RM 6 billion) cash under the 2006 Budged this year to all Singaporeans, especially the poor, why canít the Malaysian government do so when Petronas has earned nearly RM 500 billion since its inception in 1971? Oil importer Singapore has given $10.675 billion  (RM 24 billion) directly to its people since 2000 as compared to Petronas which has not given a single cent.

 

The natural question that Badawi must answer is how come Malaysians can not get a single cent directly from the RM 500 billion oil revenues whilst Singaporeans without a single cent of earning from oil revenue can benefit from RM 24 billion these last 5 years? Clearly it is important that Malaysians seek accountability and economic justice from Malaysians to prevent all our oil revenue from being misused by the select few.

(21/04/2006)      


* Lim Guan Eng,  DAP Secretary General

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