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Shahrir insists government can profit from petrol sales

Sunday, 07 December 2008 08:05am

©The Malaysian Insider (Used by permission)

JOHOR BAHARU, Dec 6 — It is not unusual for the government to gain revenue from the sale of petrol, Domestic Trade and Consumers Affairs Minister Datuk Shahrir Abdul Samad said today.

In fact, the last time government gained such revenue was from September 2001 to February 2002, he said.

“This is done in countries like Singapore, Australia and United Kingdom even when the price of petrol is high. But in our country the government subsidises petrol when the price is high, thus when the price is low the government would gain revenue,” he said.

Shahrir was asked to comment on an English daily report saying that the government was set to get windfall gains of up to RM16 million per day based on yesterday’s crude oil price of US$44 (RM158.40) per barrel and a consumption estimate of 27.5 million litres per day.

He was met after launching the price reduction campaign by UO Superstore and Produk Malaysia Citarasa Kita programme at Plaza Angsana here.

Shahrir, who is also Johor Baharu Member of Parliament, said it was unfair to make the assumption based on the price of fuel of the day as it would only be delivered to the refineries and consumers in two weeks’ time.

“We have to see it from the whole year point of view, say that until today the subsidy expenses was RM18 billion and that for November and December the government gained RM300 million, this mean throughout the year the government spent more on subsidy than it gained from the revenue of selling petrol,” he said.

An analyst was reported in the newspaper as saying that at this level, the market price for RON 97 should be about RM1.30 per litre, which was 60 sen lower than the RM1.90 per litre Malaysians are currently paying.

“If you based the assumption on the US$48 per barrel, then of course you will talk about RM1.30 per litre but since it is US$58 average price per barrel for the whole of November, then the market price after you add in the industry margin would be RM1.50,” Shahrir lambasted the analyst who was not named.

The analyst said the government over the past two months would probably collect revenue of around RM500 million from the sale of RON 97.

In the report, the Federation of Malaysian Consumer Associations (Fomca) secretary-general Muhd Sha’ani Abdullah requested the government to reveal how it would spend the windfall revenue.

He also urged the government to invest the money in public transportation for the benefit of everyone.

To this Shahrir said the revenue would go to the consolidated fund and other funds such as the fund to improve the public transportation.

Earlier on in his speech, UO Superstore board chairman Datuk Zahari Omar said throughout the three-month low price campaign, the company’s gross profit was expected to decline about RM320,000.

“Despite the lower gross profit, we would stick to the campaign to benefit the consumers’ whose buying power have been reduced due to the global economic recession with the hope of easing their burden,” he said.

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