Press Statement by Lim Guan Eng in
Georgetown, Penang on Saturday, 6th December 2008:
Irresponsible and immoral for the Federal Government or any other party
to earn RM 16 million a day by manipulating petrol prices that does not
reflect the plunging international price of oil to USD 40 per barrel
Malaysians would consider it irresponsible
and immoral for the Federal Government or any other party to earn RM 16
million a day at the peopleís expense by merely manipulating petrol
prices that does not reflect the plunging international price of oil
which is currently at around USD 40 per barrel.
Since July 11 when a barrel of oil hit a record $147.27, oil has fallen
72% to USD 40.81 per barrel in less than five months, The expected
economic recession following the global financial crisis has caused the
drop in petrol prices to its lowest level in four years since December
2004. A front-page report in The Star estimated The Government is set to
get windfall gains of up to RM 16 million per day based on crude oil
price of US$44 per barrel and a consumption estimate of 27.5 million
litres per day. This would work out to extraordinary gains of RM 6
billion a year at the expense of Malaysians. But for whose benefit?
At USD 44 per barrel, the market price for RON 97 grade petrol should be
about RM1.30 per litre, which is 60 sen lower than the RM1.90 per litre
which Malaysians are currently paying. If prices continue to plummet
further from USD 44 per barrel to USD 30 per barrel, the extraordinary
gains for the Federal government would be even higher than the RM 6
billion a year.
There is no doubt that the prices should be reviewed sharply downwards
from RM 1.90 per liter which is too high. However, too low a petrol
price would also encourage conspicuous consumption and wasteful
spending. I would like to suggest that the government follow the
previous historical band set in the past when the petrol price was fixed
at RM 1.37 per liter when the price of oil was USD 38 per barrel on
01/05/04 to USD 1.42 per liter when the price of oil was USD 47 per
barrel in 01/10/04.
At the same time, Finance Minister Datuk Seri Najib Tun Razak should
fully account to the public how the windfall profits of at least RM 16
million or RM 6 billion a year would be spent for the public benefits.
Malaysians have a right to expect that such a huge sum should not be
used solely for the private benefit of the few but for all Malaysians.
Domestic Trade and Consumer Affairs Minister Datuk Shahrir Abdul Samadís
recent revelation that at US$65 (RM235) per barrel or at RM 2 per litre
the Government will save more than RM 10 billion. With the price of oil
now at USD 40, one can imagine how much larger the savings in fuel
subsidies are to the extent that instead of paying lower fuel subsidies,
the government can even make extraordinary gains. Fuel subsidies in
October 2008 was RM 610 million, compared with RM 3 billion in May 2008
when oil prices peaked.
The people have a right to enjoy the tens of billions of fuel savings
and extraordinary gains by the government as well as the record profits
of Petronas with a record pre-tax profit of over RM 63 billion.in the
six months ended Sept 30. Petronasí cash, fund investments and other
investments by rose by RM 23 billion to a total of RM 124.7 billion from
a year ago, enough to pay off more than half the national debt of about
RM 220 billion that comprises all government and private sector debts.
Lim Guan Eng, DAP
Secretary-General & Penang Chief Minister