Parti Keadilan Rakyat (PKR) today reiterated its position that the government is capable of maintaining or even reducing fuel prices despite soaring global crude oil prices.

PKR information chief Tian Chua said national oil company Petronas would be making bumper profits resulting from current record high crude oil prices which can be channeled into fuel subsidies.

Chua was responding to allegations by government ministers that the opposition would bankrupt the country by reducing fuel prices should the latter come into power.

Global crude oil prices have been on a steady rise for over a year now and is presently hovering just below the US$100-per-barrel mark.

To cushion the impact, the government announced a steep increase in pump prices effective March 1, 2006. Local fuel prices are heavily subsidised by government and proposals are on foot now to totally reduce the subsidy in the next couple of years.

Chua said Petronas’ had posted a record RM46.4 billion net profit during its last financial year ending in March, 2007. He added that higher crude oil prices expected this year would propel its profits even further.

“There is no evidence that the country would be bankrupt if the current domestic fuel prices are maintained or even reduced,” said Chua during a press conference at the party’s headquarters today.

On the contrary, Chua said, the people and the government should be happy that crude oil prices are rising because Malaysia is a net fuel exporter and Petronas is bound to profit more.

Fuel hikes soon

Chua believed that at present, the government was on a heavy public relations campaign to prepare the public for an impending hike in fuel prices “because it cannot manage its finances properly”.

“They are building their case to tell the public that they (the government) are ‘forced’ to increase fuel prices. In reality, there is no reason why consumers should be burdened by government inefficiency,” he added.

Soaring cost of maintaining fuel subsidies have always been the government rationale to raise fuel prices.

On Monday, the government announced that an estimated RM35 billion would be spent on fuel subsidies this year, assuming that crude oil remain at US$100-per-barrel.

“The 35 billion ringgit was calculated at around 100 dollars. If (oil) is going to remain at 100 dollars for the full year of 2008, that will be the figure,” Second Finance Minister Nor Mohamed Yakcop told AFP .

Further fuel hikes are expected soon, but the timing of such a move would be uncertain as the general election is expected to be held soon.