[Malaysia] Share the Spoils!

Don’t hoard Petronas profit, share the spoils

Roshan Jason, Malaysiakini, Aug 4, 2005

It has been more than three decades since Petroliam Nasional Bhd (Petronas) was established and profit has been gushing in. Therefore, according to a group of DAP leaders, it is high time the company started contributing directly to Malaysians.

In its mission statement, the company stated that its objective was to contribute to the well being of the nation and people. This morning, DAP secretary-general Lim Guan Eng led a 15-member delegation to meet with Petronas representatives at their office in Kuala Lumpur in a bid to hold them to their word. “DAP is well aware that since Petronas was established on Aug 17, 1974, payments totalling RM246 billion has been paid to the government.

“The time has come to contribute not just to the country but directly to the people of Malaysia,” said Lim in a memorandum to the company. He urged the wholly-owned government entity to “share its RM35.5 billion profits for the 2005 fiscal year with 25 million needy Malaysians to fight inflation caused by higher fuel prices”.

Petronas - the only Malaysian company to be listed in the Fortune Global 500 list of the world’s biggest firms - was told that even if it gave RM1,000 to each Malaysian, it will still have over RM10 billion left in its coffers.
Lim, however, failed to hand the memorandum to Petronas chairperson, president and chief operating officer Mohd Hassan Marican. The document was received by Petronas’ legal and corporate affairs division senior general manager and company secretary Mohammed Azhar Osman Khairuddin, who promised to pass it on to Mohd Hassan. Also present were DAP parliamentarians Fong Kui Lun and Tan Kok Wai.

‘It’s unethical’

Speaking to the media later, Lim said Mohammed Azhar also suggested that they approach other oil companies like Shell and Exxon to request for the same. “It is something we will likely do but it must be noted that Petronas controls about 70 percent of the upstream petrol market,” he added. Upstream market includes the extraction of natural resources from the land, which in Petronas’ case is exported.

“It’s unethical. The oil belongs not to Petronas, Dr Mahathir Mohamed (former premier) nor Abdullah Ahmad Badawi (current premier). It belongs to the Malaysian people,” stressed Lim. Therefore, he found it only fair for the company to distribute its gains especially to the poor. However, he said that those earning above RM80,000 per annum should not benefit from the handout. The Petronas representative declined to comment when approached.

Meanwhile, Lim also took the opportunity to challenge Minister in the Prime Minister’s Department Mustapa Mohamed to a debate on the latter’s recent assertion in the media that fuel price hikes will save the government RM1 billion. “I want to challenge Mustapa to a debate on the issue. He seems to be missing the wood from the trees. With profits of RM35.5 billion, can Petronas not afford to pay the RM959 million?

“Despite the recent hike, the government claims that it will still have to bear RM6.63 billion in petrol subsidies and tax exemption forgone of RM7.85 billion for 2005 - totalling RM14.5 billion,” he said in the memorandum.
Lim said there can be a way for all parties to win in the situation if all of Petronas’ profits are distributed to citizens, thus allowing fuel subsidies to be removed and sales taxes on fuel to be imposed. This will allow fuel prices to be determined solely by market forces.

“Malaysians cannot understand why they have to pay higher fuel prices and watch Petronas make money. “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 than be used to salvage questionable projects from scandals and bankruptcy,” he added. Fuel prices here have gone up five times in the past two years with retail diesel price almost doubling.