Cabinet should use 10% of Petronasí additional windfall profits for the
latest financial year to relieve the RM2.2 billion burden of low-income
Malaysians as a result of the latest hike in the prices of diesel and
Speech at the DAP Lawan Kuda/New Kopisan Solidarity Dinner
by Lim Kit Siang
(Gopeng, Perak, Thursday): The increase per litre of 10 sen for petrol and 20 sen for diesel today will have the twin adverse effects of fuelling inflation and aggravate the slowdown of economic growth.
A statement yesterday from the Prime Ministerís Office said that the government had subsidized RM4.8 billion worth of petroleum products in 2004. If prices were not raised this year, the government would have to bear a subsidy of RM8.96 billion. With the new prices, the Government would pay RM6.7 billion in subsidies, saving RM2.2 billion a year.
The Cabinet should use 10% of Petronasí additional windfall profits for the latest financial year to relieve the RM2.2 billion burden of low-income Malaysians as a result of the hike in the prices of diesel and petrol today to forestall inflationary pressures and the worsening of an economic slowdown.
It has been reported that Petroliam Nasional Bhd (Petronas) is expected to post strong earnings and profit growth for the year ended March 31 2005 because of the unrelenting rise in crude oil prices, hitting around US$60 a barrel.
Petronas reported a RM18.9 billion profit for the first half ended September 30, 2004 compared with RM10.1 billion in the corresponding period. For the 2004 financial year, Petronas registered a profit of RM$26.3 billion.
With Petronas profits for the 2005 financial year in the region of RM50 billion, or an additional windfall profit of some RM24 billion as compared to the previous year, it would be no strain for Petronas to absorb and relieve the RM2.2 billion burden of low-income Malaysians resulting from the latest hike in the prices of diesel and petrol, as it would only amount to some 10 per cent of the additional Petronas windfall profits when compared to the previous year or less than five per cent of its total profits for the latest financial year.
Petronas is profiting immensely from the skyrocketing oil prices, and it is only fair that it should ensure that the 26 million Malaysians benefit from the country as an oil-producing and exporting country by relieving the consumers of the RM2.2 billion burden as a result of the latest round of petroleum price increases.
Lim Kit Siang, Parliamentary Opposition Leader, MP for Ipoh Timur & DAP Central Policy and Strategic Planning Commission Chairman