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DAP To Hold Public Forums Opposing Any Fuel Increase As Petronas Huge Profits Is Sufficient To Fund the More Than RM 12 Billion In Direct And Indirect Fuel Subsidies Required to Maintain Our Fuel Price

Press Statement
by Lim Guan Eng

(Petaling Jaya, Friday): DAP strongly opposes the 5 sen increase in fuel prices from 1 October 2004 because Petronas huge profits is still sufficient to fund the more than RM12 billion in direct and indirect fuel subsidies needed to prevent any fuel price increase.  DAP believes that there can be a win-win solution if Petronas can act in the national interest by paying out the RM 12 billion fuel annual subsidies from its huge profits to forestall any price increase so as not to burden ordinary Malaysians. 

Minister in the Prime Minister’s Department Datuk Mustapha Mohamed had said that high oil prices to US$ 50 per barrel had caused direct and indirect fuel subsidies to hit RM 11.1 billion for the first 9 months of this year and the government can not afford to do so anymore. However Petronas can afford to do so on behalf of the government and all Malaysians when it contributes more than 20% of the 2005 government projected revenue of RM 99.1 billion. For the year 2005, petroleum is expected to contribute RM 24,123 million to the Government’s revenue comprising:

  • Petroleum income tax of RM 11,274 million as a result of the rise in oil price of USD 30.35 per barrel in 2003 to  USD 37.00 per barrel in 2004.;

  • Export duties of RM 1,576 million;

  • Petroleum and gas royalty of RM 2,575 million;

  • Income from exploration of oil and gas of RM 98 million; and

  • Petronas dividend of RM 8,600 million.

Based on the huge amount of oil-related tax revenue, it is clear that Petronas has benefited from the rise in oil prices. It is regrettable that we do not know how much Petronas is earning, but we can be quite certain that Petronas can afford the RM 12 billion in fuel subsidies required to maintain our present fuel prices.

The government must be responsible about increasing fuel prices as it has great impact on the economy, especially small businesses. For example the 5 cents increase in fuel prices would cause costs in a transport company to would rise by  3%. Customers will have no choice but to pay higher prices.

In the interests of transparency and accountability DAP urges the government to reveal Petronas profits and utilize these huge profits for the benefit of ordinary Malaysians. As an oil producing country, Malaysians should enjoy the benefits by paying low fuel prices.  For this reason, DAP shall be holding a series of  forums opposing any fuel increase as Petronas huge profits is sufficient is sufficient to fund the RM12 billion subsidies to maintain our fuel price.                           

(1/10/2004)

* Lim Guan Eng, DAP Secretary-General