The opposition today threw a challenge to Deputy Prime Minister Najib Abdul Razak to show how the country could be bankrupted if petrol prices were not allowed to increase.

Najib had on Monday claimed that the opposition’s promise to bring fuel prices down should it win government would “bankrupt the country”.

“Say, if Petronas makes RM70bil or RM80bil (and) they want to channel it for fuel subsidy. Then where will the government obtain funds for building roads, hospitals and other amenities?” asked Najib.

Today, opposition PKR treasurer-general William Leong ( right ) fired a return salvo against Najib.

“Let the people know what Petronas has used its revenues for since 1974. Let the people know why, and prove to us how the people would become bankrupt if petrol prices were not allowed to be increased.

“We are entitled to ask for an accounting of why the people must pay for an increase in petrol prices when we are not given information on how revenues are spent...

“Before the government asks the people to take up the extra burden, this information should be given,” he said.

Leong also challenged Najib to prove his assertion that maintaining fuel prices would eat away funds for the building of roads, hospitals and other basic amenities.

Instead, he cited a litany of ‘wasteful’ public expenditures, which include such ‘prestige-enhancing’ projects as the Sepang Formula One Circuit and the Monsoon Cup as well as using Petronas’ profits to subsidise independent power producers (IPP).

He also referred to a number of failed projects that have cost billions in taxpayers money, such as the RM400 million compensation for the cancellation of the Broga incinerator project, the RM360 million compensation for the cancellation of the half-bridge to Singapore, and the RM4.6 billion bailout of the troubled Port Klang Free Zone project.

Petronas’ 2007 annual report put fuel subsidies in 2006 at RM9.76 billion when world oil prices were at US$75 per barrel.

Even with the latest surge of world oil prices to US$100 per barrel, Leong said that the fuel subsidies would amount to about RM12.2 billion a year.

“These subsidies would not cause the country to be bankrupt as suggested by the deputy prime minister,” said Leong.

The government under immense pressure to increase petrol prices this year after promising not to do so last year. The last petrol hike was in 2006 when prices at the pump went up by 30 sen to RM1.92 per litre.

It has been estimated that without government subsidies, petrol prices could be as high as RM2.50 a litre.

Family shortchanged by Petronas

Meanwhile, PKR information chief Tian Chua ( photo, left ) lambasted the state-owned oil company’s domestic marketing arm Petronas Dagangan Bhd (PDB) for its dispute with a family in Paya Jaras, Sungai Buloh.

PDB had leased the Paya Jaras petrol station - which is sitting on land owned by the family and categorised as ‘agricultural’ - for a mere RM14 a month until the pump’s closure last September.

Malaysiakini had earlier reported the opposition’s calls for Petronas to explain why it had continued to operate the petrol station - allegedly among PDB’s top 10 revenue earners - for 23 years without any conversion or rectification of this error.

http://www.malaysiakini.com/news/73833

Picking up the issue today, Chua revealed that the family had subsequently sold the land to Caristra Holdings Sdn Bhd - which he described as a PDB’s agent - for RM2.4 million.

However, soon after PDB entered into an agreement with Caristra to lease the same property for RM6.1 million over 40 years.

“PDB could have dealt with the landowners directly (to buy the land) at the price of RM2 million. Yet, out of nothing, Caristra as an agent (of PDB) is paid RM6 million,” said Chua, lamenting that the oil company had unwittingly paid three times more by leasing the land.

Chua also questioned how many of PDB’s 800-plus petrol stations had begun and operated in the same way.

On the issue of the impending fuel price hike, Chua said PKR was finalising a brochure that would be distributed nationwide in order to shed light on the issue.

Numbering about 30 pages, it provides a primer on Petronas, the issue of oil price increases, and argues against the government’s rationale for the withdrawal of fuel subsidies.