BN government should follow Singapore’s example of an early 2007 New Year present to its citizens by reducing fuel prices and electricity tariffs resulting from lower international fuel prices

Press Statement

by Lim Guan Eng

(Petaling Jaya, Wednesday): The BN government should follow Singapore’s example of an early 2007 New Year present to its citizens by reducing fuel prices and electricity tariffs resulting from lower international fuel prices. Singapore Power announced yesterday of a nearly 8% reduction in electricity tariff for first quarter of 2007 resulting from lower fuel prices. The prices will be increased if fuel price increased. The Singapore government announced earlier on a reduction in fuel price by 6 cents a liter.

There is no reason why electricity and local retail fuel prices can go up when the international price of oil rises but not go down when it falls. The government explains that fuel prices and electricity tariffs can not be reduced because the government can not afford to pay tens of billions of ringgit in subsidies.

Then why is it that Petronas can subsidise more than RM25 billion since 1997, of which RM14 billion or 55% went to the Independent Power Producers (IPPs), whilst the remaining RM 11 billion is enjoyed by Tenaga. For Petronas to subsidise private companies such as the IPPs and allow them to make huge profits at public expense is unacceptable, unfair and not in the national interest.

If the government is so concerned about reducing subsidies then it should show leadership by example through abolishing Petronas tens of billions of ringgit in subsidies for IPPs. Then only the government has the moral authority to reduce fuel subsidies which would not only increase efficiency in usage, save monitoring costs by government agencies as well as leakages from smuggling and malpractices.

Fuel subsidies can be removed provided that Malaysians are allowed to share in the profits from Petronas. Despite earning more than RM 500 billion in the 32 years since Petronas was established in 1974, Malaysians have not received a single cent. Instead an oil importer like Singapore can give S$2.6 billion(RM 6 billion) to its citizens in 2006 or more than S$10 billion since 2001 despite not producing a single drop of oil.

If Malaysians are allowed to enjoy in Petronas profits, each Malaysian can receive up to RM 20,000 since 1974. Have we enjoyed value for money from our resources and where have the RM 500 billion Petronas’ earnings gone? If not, then the government should explain subsidies to rich IPPs to allow them to earn huge profits. DAP urges the government to reduce the financial burden of the people and inflation by cutting down fuel prices and electricity tariffs.