Pakatan MP Tony Pua urged the government to stop exhausting national oil company Petronas profits in wasteful expenditures.

dap 2010 budget rocket cafe 071009 tony pua 01 In the light of the 2010 Budget announcement tomorrow, Pua, said Petronas, which he referred to as "the golden goose" should be protected and not abused.

According to him, the government has been funding the drastic jump in budget expenditure and the corresponding deficit with revenues from the oil giant.

"The contribution by Petronas to the government has increased from RM19 billion in 2004 to RM43.9 billion in 2006 to an expected RM67.8 billion in 2009," said the Petaling Jaya Utara DAP parliamentarian.

He said that these contributions include dividends, taxes, royalties and export duties paid to the federal government.

"The resulting impact is that there is drastic reduction in retained profits by Petronas for its reinvestment," said Pua.

He explained that reinvestment are crucial as Malaysian oil reserves are expected to last only for another 20 years or more.

"Without the necessary reinvestment, whether to discover new oil fields in Malaysia or to secure oil production rights in other oil producing countries would be impossible," he said.

Reserve at least half of Petronas profits

However, he lamented that the increasing funds from Petronas profits channelled to the federal government has resulted a decline in its reinvestment.

petronas petrol oil facility in terengganu kerteh 141108 02 The percentage of retained profits for future investment has declined from 42.5 percent in 2005 to 31.2 percent in 2007 and 21.1 percent in 2009, he said.

"This trend is extremely alarming as most of the oil majors in the world such as ExxonMobil, Royal Dutch Shell, Texaco and ConocoPhilips retain more than 50 percent of their annual earnings for future investment," said Pua.

"The reckless increase in the government's operating expenditure from RM80 billion in 2004 to RM161 billion in 2009, and the resulting need to sustain and maintain our big government has resulted in inevitable temptation to dip into Petronas' coffers," he mocked.

Pua called upon Prime Minister Najib Abdul Razak to ensure that at least half of Petronas' profits are reserved for future investments.

He also urged the government to invest its windfall revenue in economically productive sectors such as human capital, renewable energy and green technology.

Klang DAP parliamentarian Charles Santiago also said that given the problems related to the climate change the government should move away form an economy that focuses on mass production to a low carbon emission economy.

"By the way things are going we are short-changing the younger generation," said Santiago.