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Abdullah Badawi should adopt a caring and sharing economic policy by distributing Petronas profits to the rakyat to reduce their financial hardships from rising inflation and the impending fuel hike


Speech at DAP Anti-Crime Leaflets launching

by Lim Guan Eng



(Prai, Saturday): Prime Minister Datuk Seri Abdullah Ahmad Badawi should adopt a caring and sharing economic policy by distributing Petronas profits to the rakyat to reduce their financial hardships from rising inflation and the impending fuel hike. The government can no longer maintain fuel price at present levels with the record rise in international price of oil to over US$100 per barrel despite assurances by Abdullah that oil prices will remain unchanged for as long as the Government can sustain them.

The last petrol increase was on Feb 28, 2006 when the international price of oil was less than US$60 per barrel with a 30-sen increase in the price of petrol to RM 1.92 a litre, diesel to RM 1.58 and liquefied petroleum gas (LPG) to RM 1.75 per kg. With the international price of oil increasing by more than 40% since then and fuel subsidies expected to cost more than RM 32 billion yearly, the only reason that fuel prices have not been increased is due to the expected general elections. However fuel hikes are inevitable and the government has a responsibility to reduce the people’s hardship by following Singapore’s example of giving cash grants to low and middle-income families.

DAP regrets that BN has chosen to ignore the economic hardships faced by the people caused by rising inflation with lies that inflation rate is only 2% last year when it is running at more than 20% or that the country will go bankrupt by using the RM 70 billion annual profits from Petronas. Fuel subsidies cost the country around RM 32 billion in 2006 and as much as RM 40 billion annually this year or next year if the international price of oil reaches US$100 per barrel.

Savings from fuel subsidies should be transferred to low and middle-income earners in the form of cash grants. DAP had suggested that those earning less than RM 3,000 per month be given an annual grant of RM 3,000 and families with a combined income of RM 6,000 per month be given RM 6,000 annually. Such a scheme would cost between RM 30-40 billion, the same amount of fuel subsidies spent.

Every RM 4 spent on development projects is only worth RM 1, with the remaining RM 3 lost to corruption, waste, inefficiency and leakage

For this reason DAP fails to understand the perverse logic by Deputy Prime Minister Datuk Najib Tun Razak that the country will go bankrupt if the opposition reduces petrol prices. DAP is not suggesting reducing oil prices but that the earnings from Petronas be shared with the people. From 2004-6, fuel subsidies cost the country more than RM 71.3 billion. Would not the money be better spent by distributing this to Malaysians than inefficient fuel subsidies?

Or is Najib half-right in that the country will go bankrupt not from the opposition reducing petrol prices but by corrupt practices of BN leaders. US Morgan Stanley had estimated in 2004 that over the last two decades corruption cost Malaysia US$100 billion (RM 380 billion). With Petronas earning more than RM 500 billion since it was established in 1974, one can imagine how much was stolen and that only RM 120 billon or 24% of the RM 500 billion in Petronas profits were channeled to the people with the remaining 76% or RM 380 billion stolen by corrupt officials.

In other words for every RM4 spent on development projects, the value of work done is only RM 1 with the remaining RM3 lost to corruption, waste, inefficiencies and leakages. The actual loss may be higher as the scandal of repairing Chinese primary schools in Muar showed that RM 30,000 was spent when the value of work done was only RM 3,000/-.

The time has come for Petronas’ profits and oil revenues to be shared with ordinary Malaysians. Only by reducing the financial burdens of rising inflation faced by working families, can the government be responsible in economic management and ensures good governance that increases the welfare and benefit of the poor, not just the rich.


* Lim Guan Eng, Secretary-General of DAP

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