Why should fuel prices not be reduced in tandem with the 25% drop in international price of oil when Petronas Bhd recorded a 26% rise in half-yearly profits of US$6.74bil (RM24.66bil) from US$5.36bil a year ago?

Press Statement

by Lim Guan Eng

(Petaling Jaya, Friday): There is no reason why fuel prices in Malaysia should not be reduced in tandem with the 25% drop in international price of oil when Petronas Bhd recorded a 25% rise in half-yearly profits of US$6.74billion (RM24.66 billion) ending 30 September 2006 from the corresponding period ofUS$5.36 billion a year ago. The company’s cash pile swelled 13% from a year earlier to US$13.7billion as at Sept 30, and debt fell US$677 million over the six months to US$11.23billion.

There is something unethical and even immoral for Petronas to earn huge profit whilst Malaysians are unable to enjoy the benefits of reduced prices. With such rise in Petronas profits, the government’s explanations of unable to afford fuel subsidies sound illogical, hollow and selfish.

DAP urges Prime Minister Datuk Datuk Seri Abdullah Ahmad Badawi to follow Singapore’s example of cutting the oil price by 6 Singapore cents per litre so as to pass on the 25% drop in international oil price these past 2 months to consumers. Why can Singapore pass on the reduced price of oil but not Malaysia? International oil prices as fallen as much as 25% since its lowest level this year in October 20 at under US$57.

DAP expresses disappointment at the government’s refusal to reduce the price of petrol locally despite the fall in international oil prices. The people has a right to enjoy the benefits from these oil proceeds as oil resources belong to the people and not to any particular company or individual.

Several major airlines have reduced their fuel surcharges in response to the fall in oil prices. Virgin Airlines reduced its levy on international flights 14.2% or £5 to £30. Lufthansa has reduced its fuel surcharge by 16% for long-haul flights from €62 to €52 per sector. Even Singapore Airlines says it is dropping its surcharge by 10% from US$60 to US$54. Only Malaysian Airlines and Air Asia has not reduced its surcharges.

Failure to reduce oil prices would mark Abdullah’s UMNO General Assembly policy speech of fulfilling promises as just empty slogans. Mukhriz Mahathir is correct that Abdullah’s speech is old news and Abdullah is good at rhetoric that is not followed up with action.

If Abdullah is committed to fulfill his promise of ensuring justice in the administration, then he should take care of Malaysians affected by the high fuel price to ensure that wealth creation is enjoyed equitably just as the burdens of economic hardships are borne equally. Malaysians are most affected by the poor business conditions, low salaries and high cost of living. Even if Abdullah can not succeed in increasing the rakyat’s disposable income, he should take steps to reduce their cost of living.

By reducing the price of petrol in tandem with the declining international oil prices, Abdullah can show that it is not true that oil prices in Malaysia only knows how to go up but not come down. It is unreasonable and unethical for certain irresponsible parties to continue to profit at people’s expense despite the drop in international oil prices.