Aliran is alarmed by the sharp increase in petrol prices – 30 sen per litre (an 18 per cent hike) – last night. Since 1 May 2004, over a period of less than two years, the price has soared by 40 per cent. We can now expect inflation to gallop, as the prices of many items ranging from transport to foodstuff to express bus fares will now rise. As usual, these price hikes will hurt the lower-income group, including retirees, and commuters the hardest.
The government must take full responsibility for aggravating this hardship by not providing alternatives. Over the years, it has neglected public transport, which is now in a shambles in many parts of the country. The privatised bus services in Penang, for instance, are in a terrible state. Taxies operate without using their meters. A train journey from Butterworth to Kuala Lumpur takes almost twice as long as a road trip. Other forms of public transport such as electric trams in urban areas have not been explored. This marginalisation and neglect of public transport is highly irresponsible. It shows that the government does not care much for low-income commuters.
Instead, the government has promoted private motor vehicle ownership in the name of promoting a “national car”. It has signed lopsided highway concession agreements with companies that have now raked in hundreds of millions in profit. It paid more than twice the market price to buy back Malaysia Airlines shares that Tajudin Ramli had bought. And it spent billions more to bail out Malaysia Airlines and the Kuala Lumpur light rail transit operators.
Billions of ringgit of Petronas funds have been squandered. These funds were used to repeatedly bail out banks. Billions more have been spent on mega projects such as the Putrajaya construction and development. The public should be told how much has been spent so far in sponsoring Formula One (for ten years) and financing the “Malaysian” Philharmonic Orchestra, made up overwhelmingly of foreigners.
That said, as oil prices soar, Petronas has posted record profits. For the year ended 31 March 2005, the group registered a pre-tax profit of RM58 billion, a whopping increase of 55 per cent from the previous year. Its profit margin increased as well: return on average capital employed rose from 29 per cent to 37 per cent for the year ended 31 March 2005. Shareholders' funds rose to RM129 billion as at 31 March 2005 while Petronas' cash and fund investment balance soared from RM54 billion the previous year to RM75 billion as at 31 March 2005.
In view of these impressive financial indicators, the government is morally obliged to make public the Petronas accounts and account in detail for how our oil revenue is being spent. This would be in line with the Prime Minister's avowed commitment to uphold transparency and accountability. If there is nothing to hide, revealing the detailed accounts shouldn't be a problem.
Also, in the light of declining global oil reserves and ever-increasing oil prices, the government must reverse its policy of promoting private vehicle ownership and highway construction. Instead, it should start investing heavily in public transport especially buses, trams and trains. The situation is critical and the time is now.
28 February 2006