PETROL PRICE HIKES – PULLING THE WOOL OVER THE NATION’S EYES?

Says TDM, the adviser to Petronas:

“Roughly Malaysia produces 650,000 barrels of crude per day. We consume 400,000 barrels leaving 250,000 barrels to be exported”.

Said its president and chief executive officer Tan Sri Hassan Marican, “Petronas will go bust within 10 years if all its profits are handed to the Government to continue subsidising fuel”. Commenting on the fuel price increase, the Petronas boss said the corporation did not make a sen from the increase.

“All the oil companies get full market price for the petrol and diesel that they sell and the Government pay them the difference from the fixed price. This is where the subsidy comes into play,” he added. At the close of its financial year in March last year, the national petroleum company had given the Government RM52.3bil in taxes, royalties and dividends which worked out to be 32% of the Federal Government’s revenue. (http://thestar.com.my/news/story.asp?file=/2008/6/6/nation/21470681&sec=nation)

The Rakyat are also aware that

1. Our exports of crude oil are more suitable for jet liners while our imports are of the refined type suitable for motor vehicles
2. Crude oil for jets cost are more expensive than crude oil grade for motor vehicles while the cost of refined oil are multiple higher than its crude.
3. In international oil markets, there is also forward trading where we can buy and sell our crude oil now for a fixed agreed price to be delivered in the future; it’s a business which one could make much more or loose more. With the high volatility in the forex market, the potential gains or losses exacerbate.

Should the Government reconcile with updated numbers from Petronas and rationalize to the people what happened to our oil revenue and the insufficiency of our subsidies? Was there any hefty loss incurred in the forward trading (inclusive of forex losses) of our oil revenue and if there was, who should take responsibility and be accountable?

With such rationalization of updated and readily available numbers, the Rakyat should be able to appreciate the shocking action for the 40% increase in petrol price last week and the notion that there will be a further crunch comes August this year is not because all our oil production have been forward sold at a low price compared to market.

What the Rakyat do not want is to have ‘the wool pulled over the Nation’s eyes’ and then ah…demand for another Royal Commission when the Rakyat finds out indeed there was gross mismanagement of the oil revenue while the Rakyat is made to suffer and grossly misrepresented?

End