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No One Would Object The Review Or Even The Removal Of Oil Subsidies Provided That Petronas Must Share Its Huge Profits From High Oil Prices With Malaysians

Press Statement

by Lim Guan Eng  

(Petaling Jaya, Tuesday): No one would object to Deputy Prime Minister Datuk Seri Najib Tun Razak’s proposal to review or even remove oil subsidies provided that Petronas must also share its huge profits earned from high oil prices with Malaysians. It is unfair for Malaysians to pay high prices for petrol when Petronas is able to enjoy huge profits from high oil prices which hit a record US$ 70 per barrel.

The government and Petronas must not forget that oil is a natural resource that does not belong to any one person but belongs to all 25 million Malaysians. Whilst Deputy Finance Minister Datuk Dr Ng Yen Yen is correct that removal of oil subsidies will lead to an increase in the rise of productivity, she must not forget that introducing free competition and removal of corrupt practices, cronyism and financial malpractices is equally if not more effective. And yet, there is no effort from Datuk Dr Ng or Datuk Najib to allow for free competition or take stern measures to wipe out cronyism, corruption and financial malpractices within the government’s service.


Even if the government can no longer afford subsidies and taxes forgone of RM 16.8 billion for 2005 should fuel prices be maintained, Petronas can. The government states that after the three fuel price increases this year, the government still have to bear taxes forgone and subsidies of RM 14.5 billion. This represents a savings of a mere RM 2.3 billion compared to the previous RM 16.8 billion losses if fuel prices were not increased.


What is RM 2.3 billion when compared to the RM 31.2 billion given to the government by Petronas? RM 2.3 billion is insignificant when compared with the profits of RM 35.5 billion earned by Petronas, after giving RM 31.2 billon to the government. DAP can not understand why the government can not afford less than 10% of the payments given by Petronas or why Petronas can not afford to bear less than 10% of its profits.


Corruption, financial malpractices and abuse of power have eaten much of the RM 246 billion given by Petronas to the government since its formation 30 years ago. At the same time, Petronas can still earn RM 164.8 billion during the same period after giving RM 246 billion to the government. How have the people benefited directly from the RM 164.8 billion in net profits earned by Petronas?

There has been no concrete plan by the government to help the poor face rising fuel prices and inflation, which is now the highest in 6 years at 3.2% in June 2005. DAP has proposed a win-win situation where the government can raise petrol prices if Petronas gives every Malaysian RM 1,000. Even after giving RM 1,000 each, Petronas still has a remainder RM 10.5 billion. The time has come for the people to benefit directly from Petronas profits. DAP will continue with our national campaign against the fuel price increase with another demonstration at Kepong Baru Market in Kuala Lumpur at 9.00 am Sunday 4 September 2005.



* Lim Guan Eng, DAP Secretary-General

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