Petronas in the red? Impossible?

Steve Oh

Modified 11 Jun 2008, 8:27 am

There will be no viable solution to the growing problems of food shortage and escalating prices unless the government urgently works in tandem with the rakyat and provides sound leadership and opens the books of Petronas to the rakyat. There ought to be a sense of crisis in some of the problems the country faces. The tidak apa attitude or worse, clamping down on the people approach, won't do.

While it is right and proper to suggest that people adjust their lifestyles to adapt and cope with the worsening price inflationary situation, the government must be seen to be leading from the front. It must match rhetoric with exemplary deeds, something it does not always accomplish. The example, raised by an opposition politician, of government officials squandering public funds on dubious overseas junket trips is a typical example. It may be the tip of the wastage iceberg.

Petronas is seen as the goose that lays the golden egg for the government. While it is the rakyat 's most valuable asset, it has been treated like the government's private property. The public does not know how their money is spent and without transparency you can reasonably expect that people will think some expenditure may not be above board. It is a strange situation where the owners of the money don't know how much they own or how it is spent.

Some time ago Aliran challenged the parliamentarians to demand that the accounts of Petronas be tabled before parliament and provide details. Why is the government coy about publishing the accounts? What has it got to hide? But if the accounts are published and accessible to all then the rakyat can clearly see for themselves and know whether Petronas can or cannot afford to pay the way for the country.

The adviser of Petronas , Dr Mahathir Mohamed, who should know better than anyone, has publicly declared that Petronas has the money to subsidise the fuel subsidy. His suggestion of a progressive hike makes sense because a sudden hefty rise will put everyone out of kilter. It makes for difficult planning and sudden jumps in the prices of other food and materials as well.

Any business person will tell you it is only common sense not to jolt people with sudden hefty hikes, plus it is also a bad business strategy. A price creep is less painful. I also recall how they suddenly increased the tolls for some sectors by a whopping 60%. This gives new meaning to highway robbery.

But in the absence of an independent assessment of the financial health of Petronas who can say whether Mahathir or the government is right or wrong? The government obviously disagrees with Mahathir. And it can't be good for the country to be kept in the dark and to rely on the views of only two partisan opinions. Perhaps the truth may be more startling than either of the views expressed.

One would have thought that with the high prices of cars in Malaysia due to the unfair taxes on cars, motorists would be compensated by cheaper fuel especially in a country that produces oil. The published list of petrol prices in oil-producing countries makes for enlightening reading and if Venzuela, a developing country can sell petrol at 16 sen a litre and other countries sell theirs cheaper than Malaysia then there has to be justification for Malaysia's higher petrol price. Pity the government hasn't convinced the rakyat .

So far, the oil price has been subsidised by Petronas obviously by selling cheaper fuel to the public but now Malaysians are told it is not viable any longer for it to do that. That seems amazing because Malaysia is a producer of oil. And with the high price of oil you would have thought Petronas has been getting more money. So why the need to change the status quo?

I dread the time when the country faces the grim reality that not only the country's oil wells are dry but that Petronas' bank balance is in the red. Impossible? I'm not so sure. Until I am able to read its financial accounts anything is possible. The rakyat is told to accept the accounts by faith. But it is not unknown for government controlled companies to fall into a bottomless pit. Only this time there won't be a Petronas to bail out Petronas.

Many countries including Malaysia are still asleep without realising that civil unrest from the rising costs of basic items happening all at once can readily result. The price of oil affects just about the production and delivery cost of every other item.

If Malaysia is serious about not seeing more civil protests or the rakyat suffering from inordinate rises in basic commodities, it should immediately form an ad hoc task force of experts and adopt a bilateral political approach in overseeing its food and supplies interests.

As an oil exporting country Malaysia has no justification for high petrol prices. The statistics of petrol prices in oil exporting countries prove it.

It is time the cash cow Petronas is brought back from the wilderness into the paddock for a close examination. Let the financial experts and the rakyat examine the results of its financial check-up and then they will decide if the government should use the money to subsidise the plight of the people in coping with rising prices or send government officials on junket trips abroad or pin-up boys into outer space.

Without transparency the government is seen as crying wolf in its claims of being unable to subsidise the prices of many rising food items and petrol. I agree with the government that the rakyat must learn to adapt its lifestyle to the difficult times. Now let's see the government show them how with their money.