June 17, 2008

Unveiling Petronas

AT present, Petronas is arguably at its best-known among Malaysians in its 34-year history - and for reasons that are less than complimentary. It has been on the Malaysian radar since before the March 8 general election because of the bounty its accounts represent. Its name has cropped up in most homes since the June 4 hike in the price of petrol, which left Malaysians in a daze. The connect - or disconnect - between pump prices and national oil revenue seems bewildering to many. The oft-repeated question is this: Why should Malaysians pay RM2.70 a litre for petrol when the country is a net exporter of oil? This is where Monday's declaration by Petronas president and chief executive officer Tan Sri Hassan Merican, that the national oil company's accounts will be laid bare for public perusal next week, is sweet music to most ears. It is a judgment call that may have been long in coming but is being well received for its timeliness. Malaysians will finally have a glimpse through the veils that have shielded Petronas' books for over three decades.

Hopefully, this will put to rest apprehension among some quarters over the wisdom (or, as some would like to believe, the lack thereof) in the use of oil revenue. Quite simply, the overarching question is how much Petronas makes and how this is used. On record, the oil giant contributes 35 per cent of the federal government's revenues via taxes, dividends and royalties. It also spends RM40 billion a year on exploring for and developing new resources. There are also the billions in direct subsidy for gas used by power producers to generate electricity. Cumulatively, these figures feature prominently on Petronas' bottom line and may, in part, explain its inability to directly subsidise fuel now at sky- rocketing prices.

Yet, the larger question in alleviating anxiety is what the government is doing with funds coming into its coffers from Petronas. Assurances from the powers-that-be, nebulous as they may appear to be, that these revenues have been used for the welfare of not only this generation but the next may not cut it any more. Many want to read the fine print on who will be benefiting and in what way. With Malaysia's oil reserves expected to dry up by 2011, it is imperative that the government and people are in one mind on how oil revenue is to be used over the next three years and beyond. Nature's oily endowment to the country should never be a source of national discontent.

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