4 August 2005.
Tan Sri Dato Sri Mohd Hassan
Chairman, President & CEO,
Petroliam Nasional Berhad (PETRONAS)
Tower 1, PETRONAS Twin Towers
Kuala Lumpur City Centre
Yang Berbahagia Tan Sri,
Petronas Can Fulfill Its
Mission Statement Of Contributing To The Well Being Of The Country By
Sharing Out Its RM 35.5 Billion In Profits With 25 Million Needy
Malaysians To Fight Inflation Caused By Higher Fuel Prices.
Petronas Mission Statement boldly
"Our objective is to contribute
to the well-being of the people and the nation.”
DAP is well aware that since
Petronas was established on 17 August 1974, payments totaling RM 246
billion had been paid to the government, comprising 25% of the country’s
national income. The time has come to contribute not just to the country
but also contribute directly to the people of Malaysia.
DAP urges Petronas to fulfill its
mission statement by sharing out the RM35.5 billion in profits for the
2005 fiscal year with 25 million needy Malaysians to fight inflation
caused by higher fuel prices. However, rich Malaysians earning more than
RM 80,000/- would not be able to benefit.
In the past 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. With
the latest 10 cents rise in petrol, 5 cents per kg in gas and a 20 cents
rise in diesel on 31 July 2005, inflation may breached the critical 4%
this year which may lead to a rise in interest rates.
During this corresponding period
of rising inflation, Petronas has earned record profits rising by 50%
from RM 23.7 billion last year to RM 35.5 billion. Such profits exclude
the RM 31.2 billion paid by Petronas to the Government in the form of
dividends, royalties, taxes and export duties as compared to RM 21.3
billion last year.
DAP would not object to the
government increasing fuel prices if they distribute all or part of
Petronas 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 paying
high fuel prices. If the government can receive RM 31.2 billion from
Petronas for 2004, why is it that ordinary Malaysians do not get a
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 nearly 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 to paying RM 956
million? Malaysians can not understand why they have to pay higher fuel
prices and watch Petronas make money.
Despite this hike, the Government
claims that it will still have to bear RM6.63 billion in petrol
subsidies and tax exemption forgone of another RM7.85 billion for the
year 2005 bringing total subsidies of RM 14.5 billion. DAP proposes that
if all the profits from Petronas are distributed to Malaysians then fuel
subsidies can be removed and sales taxes on fuel can be 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
Economically efficient as there
would be no distortion in the market price for fuel, no smuggling and
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 given in 2004.
Distributing Petronas profits to
the people, especially the poor, is fair. Removing fuel subsidies that
benefits the rich driving big luxury calls is also equitable. Further,
Petronas controls only 30% of the retail petrol sector with the
remainder held by foreign oil companies. Continuing with fuel subsidies
would also help to subsidise these foreign oil companies.
If the government wishes to stop
fuel subsidies and increase fuel prices to international levels, it is
only fair to distribute Petronas’ profits to the people. Better the
money be spent on all Malaysians than be used to salvage questionable
projects from public scandals and bankruptcy. The people have been
deprived long enough!
LIM GUAN ENG