Fuel Fools

Finally, what the Siber Party of Malaysia (M) has been saying about fuel prices has received support from none other than Petronas CEO Hassan Marican courtesy of a Bernama news report.

Business
September 18, 2007 20:59 PM

Fuel Subsidies Unsustainable, Says Hassan Marican

KUALA LUMPUR, Sept 18 (Bernama) -- Petronas president and chief executive officer Tan Sri Mohd Hassan Marican warned today that paying out fuel subsidies is unsustainable over the long term as the skyrocketing global oil prices have made it inefficient to correct the economic imbalances they are meant to address.

He also hit out at some companies which exploit the gas price subsidised by Petronas to achieve cost savings and consequently their financial targets.

"Who are we subsidising? Can we continue to afford that? There will come a time when our country cannot subsidise so many things," he stressed.

Petronas is pushing for a hike in gas charges, as it is only charging RM6.40 per mmBtu (million British Thermal Units) to local industries since 1997 although the subsidised gas costs about RM40 per mmBtu.

"Indirectly, we are subsidising the world," he told an editors' briefing on the East Coast Economic Region (ECER) here.

Oil prices shot to an all-time high of above US$81 a barrel on Tuesday on concerns of a winter supply squeeze in the United States.

Hassan also said the amount of total subsidies, even excluding oil and gas, paid out by the government is already "horrendous."

Subsidised gas so far this year has cost Petronas some RM15 billion. Since 1997, the national oil corporation has provided close to RM50 billion in gas subsidy.

Subsidies given by the government to gas and petroleum should cost Petronas more than RM35 billion for the whole of this year.

Despite the high oil prices, he said, the margin has been squeezed due to escalating costs in extracting the commodity.

Hassan reasoned that the subsidised gasoline and diesel had actually benefited the rich people - They have three BMWs each and leave their air-conditioners on in their mansions all the time.

For gasoline, he said, at the existing price RM1.92 per litre, the actual price should be RM3 per litre.-- BERNAMA

Yes, world oil prices are on the up and up and we are paying pittance for it at the pump but it still costs us plenty from our tax ringgit. Not that many of us pay tax but for those who do, they are basically underwriting all that oil that is fuelling our vehicles and industries and utilities.

Time for us to wean ourselves from such subsidies.

Yes, we advocate fuel prices at real cost but vehicles sold without the additional taxes. At least then, the economy will not be that distorted and motorists will figure out the exact cost of owning and using a vehicle.

Heck, we will even include a fossil fuel tax incorporated in the pump price with that money going to ameliorate the effects of pollution in the environment.

And for taxi drivers and operators who want to raise flag rates and fares, even if gas prices do not go up, we agree but with the caveat of stricter enforcement to ensure that the taxis use the meters, are clean and taxi drivers courteous and willing to pick up all fares.

You want to make money but you have to follow the rules, that's what we say!

Also, stage buses and all other buses will have to be gas-powered to reduce the effect on the environment. Buses will have right of way in two lanes in any three-lane roads within any city limits during rush hour.

For those who are in cars during that time, too bad! Use mass transit systems instead!

Now what do you think of that? If you say yes, vote for the Siber Party of Malaysia (M). Especially in our frontline area of the Federal Territory of Kuala Lumpur.

Otherwise, you can always hum along to this!