Bingkor assemblyperson Jeffrey Kitingan wants to know what ‘Plan B’ is for Sabah budget 2015 as the collapse of oil prices globally will affect the state revenues as well.

“The question on everyone’s mind is what Plan B is for the national and Sabah budgets 2015, as the oil prices plunged 60 percent from US$110 to US$48 per barrel.

“This will create a huge dent in projected revenues from oil,” Kitingan, who is Star Sabah chief, said in a statement.

He said when Prime Minister Najib Abdul Razak unveiled the national Budget on Oct 10, 2014, the world oil price was about US$90 per barrel and when Chief Minister Musa Aman announced the Sabah Budget on Nov 7, 2014, it was about US$80.

However, the budget projections were based on the assumption of oil price at US$100 per barrel. They now seem half-a-world away from the current US$48 per barrel, up from a low of USD45, he said.

In late November 2014 when the world oil price was at US$71 a barrel, Petronas disclosed that it would be very bad for the national oil and gas company if the price dropped below US$65 and that for every US$1 change in oil prices, Petronas’ pre-tax profit would be reduced by RM1 billion.

“Regardless of the budget revisions by the federal government, the Sabah government needs to work out and implement an alternative Plan B for its Budget 2015,” Kitingan  said, pointing out that in view of the changing and bleak global outlook, the World Bank had projected a 0.4 percent reduction in the global growth forecast for 2015.

Re-look and re-focus, state told

He also suggested that the Sabah government should also take the opportunity to re-look and re-assess its 2015 budget and focus on sustainable development for the people’s well-being.

Starting April 1, Sabahans will have to pay the goods and services tax (GST) which the federal government will collect, without paying back Sabah’s 40 percent entitlement.

This reimbursement could have been used for the benefit and welfare of Sabahans.

Sabahans already have to pay higher prices for goods due to the unfair cabotage policy and prices will be higher in 2015 with the 15 percent depreciation of the ringgit making imported items more expensive, he said.

The only consolation was petrol and diesel prices would be cheaper but the cheaper fuel had not translated into lower prices. In fact, despite the cheaper fuel price, school bus fares were going to be higher if increases in the peninsula were any indication, he said.

“Perhaps, as part of the 2015 Budget revision, the Sabah government should make a request for the federal government to defer GST for Sabah, at least for 2015 and give some breathing space for Sabahans with the turmoil expected in the economy and lower incomes for the rural folk, with low prices for rubber and palm oil expected to continue for the rest of the year,” Kitingan added.