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The Government Can Increase Fuel Prices If They Distribute All Of Petronas Profits To 25 Million Malaysians


Press Statement

by Lim Guan Eng  

(Petaling Jaya, Monday): DAP would not object to the government increasing fuel prices if they distribute all of Pertronas profits to 25 million Malaysians. It is unethical and against the national spirit for Petronas to reap huge profits from high oil prices at the expense of the sufferings of ordinary Malaysians.

Petronas recorded its highest after-tax profits in history of RM 35.5 billion for the financial year ending 31 March 2005. This sum does not include the payment of government dividends and taxes of RM 31.2 billion. If the government can receive RM 31.2 billion from Petronas, why is it that ordinary Malaysians do not get a single cent? 

RM 35.5 billion is so huge that even if every 25 million Malaysians received RM 1,000 each from Petronas, Petronas would still have more than RM 10 billion left to conduct business. If the entire profits were distributed, each Malaysian can receive RM 1,500/-.

The government states that the latest fuel price increase will save RM 956 million in subsidies. With profits of RM 35.5 billion, can Petronas not afford this RM 956 million? Malaysians can not understand why they have to pay higher fuel prices and watch Petronas make money.

In the past one year since 1 May 2004, petrol prices have risen five times by 25 cents or 18% from RM 1.37 to RM 1.62 per liter. Diesel have increased even higher by 64% or 50 cents from 78.1 cents to RM 1.281 per liter. Such huge increases only worsen inflation which rose by 3.2% in June 2005, the highest in 6 years. DAP have received many complaints that despite such a high price increase, wage levels have not gone up. 

DAP proposes that if all the profits from Petronas are distributed to Malaysians then fuel subsidies can be removed and sales taxes on fuel imposed; thus allowing fuel prices to be determined solely by market forces. This may be a win-win situation:

  • For Malaysians who can enjoy the fruits of Malaysian natural resources and  afford to pay for higher fuel prices,

  • Economically efficient as there would be no distortion in the market price for fuel, no smuggling and black-market profiteering;

  • Avoid misuse and abuse of Petronas funds for dubious government projects; and

  • Petronas would still be able to fund its development activities from the RM 31.2 billion in royalties, dividends and taxes given to the government. 

The time has come to distribute earnings from oil to the people, especially the poor. DAP calls on Petronas to perform a national service by absorbing this RM 956 million. Oil belongs not to Petronas alone but to all Malaysians. Malaysians have a right to benefit from Petronas profits.

If the government wishes to stop fuel subsidies and increase fuel prices to international levels, it is only fair to distribute the entire Petronas profits to the people. Better the money be spent on all Malaysians than be used to save questionable projects from public scandals and bankruptcy.

The recent case of former Sabah Chief Minister and Federal Minister Datuk Osu Sukamís failure to pay a RM 7.1 million gambling debt to a London Casino highlights the huge gap between the rich and poor in Malaysia. No one is surprised that the United Nations Human Development (UNHDP) Report 2004 listed Malaysia with the worst income disparity between the rich and poor in South East Asia.

For the rich such as Datuk Osu, millions of ringgit could be lost on the casino tables in one night. Osu was first given credit by the London Ritz casino on 11 February 2002 and went on a 50-day gambling spree:-

  • Gambled daily after 11 February 2002;

  • Gambled non-stop for one week;

  • Visited casino nine times from May 11 to May 21;

  • Visited casino on August 31, Malaysiaís national day; and

  • Gambled daily from 1 to 15 September 2002.

In seven months of 2002, Osu gambled a total of RM 158.7 million, registering a loss of RM 31.6 million. On 9 September 2002 alone, Osu gambled RM 13.4 million and lost RM 11.8 million. When such wealth can be thrown away by rich BN leaders such as Osu, it is not surprising that the UNHDP Report revealed that the richest 10% in Malaysia controls 38.4% of our economic income as compared to our poorest 10% controlling only 1.7%. 

Malaysia should be ashamed that we have the greatest income disparity in South-East Asia, worse than Thailand, Phillipines, Indonesia and Singapore. For this reason profits from Petronas should not be used to bail out the few failed government projects such as the RM 10 billion Perwaja scandal, but distributed to the poor to reduce the income gap between the rich and poor.

(01/08/2005)      

                                                       


* Lim Guan Eng, DAP Secretary-General
 

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