Thursday, March 09, 2006

Petrol Subsidy and Petronas

Title: Petrol subsidy and Petronas.
In my previous letter, I wrote about the unfairness of subsidizing petrol and that I would prefer to receive cash dividend from Petronas as a shareholder. A few letters in response have been highlighting the state of country’s public transport and motorists’ behaviour towards bicycle users. We must realize here the big picture that as a company, Petronas should maximize its returns on shareholders funds, unfettered with social obligation of having to subsidize the petrol users. Petronas management should be given free hand to do their job, which is maximizing return to the shareholders, without any interference from the government, or the Prime Minister. The profit it makes should be returned to shareholders (all of us, Malaysians) in the form of dividends. I have no scruples if some or all of the dividends are given to the government on our behalf to spend on welfare, housing or cash subsidy (social welfare payment, income top-up) of the poor, disabled, pensioners and low income group. So far, since the formation of Petronas, I have never heard of any dividend payment. Correct me if I am wrong.
I read about Petronas paying taxes on its profits to the government, but do we realize that it could have paid much more in taxes if it doesn’t have to subsidize any of its customers? Do we realize that we are also subsidizing citizens of neighbouring countries (Singaporeans and Thais) who cross the border to fill up their tanks?
Most of us would rightly grumble about petrol price increase, but do we realize that our income could have been much higher and comparable with Singapore and other Western countries if we didn’t waste our precious resources on megaprojects to line up the pocket of cronies? The duty of the government and the civil servants is to serve the people and do what is in the best interest of its citizens.
It is true that Malaysian cities is poorly planned for public transport users and cycle users, but it’s never too late to start lobbying the town planners and make some changes to our habits. Many Western cities have dedicated cycle lanes parallel or on the roads, and cycles are very much encouraged. Public transport are subsidized by the government, the monies are from petrol taxes and road user taxes. Concerted efforts have been made to turn people away from their cars towards environmentally friendly public transport and bicycle. Why don’t we all make an effort to use bicycle for short distances? Its good for our health and environmentally friendly.
Bravo to the letter writer who rightly argued that petrol subsidy is classified as consumption and we should spend more money on education and health which could be classified as investment in our future.

Noor Yahaya Hamzah

1 comment:

Anonymous said...

The dividends from Petronas is wishful thinking. Heck, the full set of accounts were never scrutinised and the accountability stops at the PM's desk. I believe the management of Petronas is doing their level best but more could have been achieved if good governance is allowed a little room.
The bicycle issue is a subject that should be examined from the Malaysian perspective taking into account physical planning, traffic flow and dispersal, topography and road levels, residential and commercial interconnectivity, road user safety, attitude, climatic conditions and relevant amenities.
Noor Yahaya, needs only to spend half an hour in the morning between 7.10 to 7.40 at a typical suburban school to understand why parents send their children to school by car. At TTDI, 90% of students are driven to school in cars. I observe only tow school buses for the last 4 years. For the 2.5km one way journey, cycling to school, exposes my childern to 8 junctions , 5 traffic lights and one major highway crossing. The terrrain is rather gentle but the vehicular traffic is very heavy. Rain and sun are also relevant factors that affect the relative comfort level before and after school session. Bicycles are good for rides at the park only.
Due to the inelasticity nature of the demand, there will naturally be the period of moaning and groaning. Unless we work harder to earn more or plan to seriously migrate, it is best to shut up.


I heard petronas' M&A is just one page - accountable only to the PM

Dude, that was during Mahathir time, now they just sms the M&A to Pak Lah,
It says:............ (post your most creative sms here...)...