I read with amusement the suggestion by a local opposition rep calling for the fuel prices in Sarawak sold by Petroleum Sarawak Berhad (PETROS) to be further subsidised.
For the record, the price of petrol (RON95) has been capped at RM2.05 per litre since March last year by the federal government and has not increased despite the ongoing international Russian-Ukrainian conflict.
This conflict has pushed crude oil prices past the US$100 mark per barrel — the highest level since 2014.
All this while, its non-subsidised counterpart, RON97 has seen a 70 per cent increase in price during the same period from RM2.35 per litre to its peak RM4 per litre last month.
The price of diesel has been capped at RM2.15 per litre since February last year while the price of liquefied petroleum gas (LPG) has been pegged for years.
In rebutting that the Sarawak government is unable to provide cheaper prices of petrol, diesel, and LPG to the people because they are listed as controlled items and restricted by the Competition Act 2010, Pending assemblywoman Violet Yong dismissed it as being baseless and a mere excuse.
“In my view, the reasoning given by the Premier (Datuk Patinggi Tan Sri Abang Johari Tun Openg) is baseless and a mere excuse. It also shows that the Premier himself is confused about the applicable laws,” she said.
She continued: “In this circumstance, the Sarawak government has the right to lower the price of RON95 and LPG to benefit Sarawakians. It is not true to say that PETROS cannot sell petroleum products at a cheaper price.”
Two things — one is that just because we can, it doesn’t mean that we should. Secondly, the financial repercussions are extremely severe, post COVID-19 where the taxpayer’s funds should be spent prudently.
The cost to subsidise fuel are astronomical — the federal government spent RM11 billion to ensure that fuel, including diesel and liquefied petroleum gas (LPG) remained affordable to the masses last year.
Finance Minister Tengku Datuk Seri Zafrul Tengku Abdul Aziz last month said due to the international conflict between Russia and Ukraine along with the rising crude oil prices, the cost to continue the subsidies would be almost tripled to RM28 billion this year.
In realising this, the minister said the government will review the fuel and cooking oil subsidy mechanism, so that it will be more targeted towards aiding and subsidising the vulnerable groups and those who really need help.
What it means is that it is becoming too expensive to subsidise fuel. So, the question now becomes, is it really prudent — amid the rising oil prices and the already subsidised black gold — that we introduce another blanket subsidy?
I get it, it is very popular to propose such move. Everyone wants things to be cheap, myself included, but the rationale of doing just that is mindboggling.
It would cost billions to do so and with subsidies, there would eventually be leakages — meaning that those who should not be enjoying the subsidies are also reaping its benefits.
Take the recent reopening of the Malaysia-Singapore border, the social media had a meltdown over cases of Singaporeans filling their cars with our cheap petrol.
Some were even seen to be tilting their cars with contraptions such as car jacks to take advantage of every square
centimetre of space in the fuel tank.
This is because the price of petrol in Malaysia can be about 45 per cent cheaper compared to Singapore.
I do not mean to sound crass but then again in the eventuality that our borders with neighbouring countries are fully reopened and travel resumes as usual, do we want to see foreign vehicles erecting car jacks at our PETROS fuel station and milk every sen of our hard earned ringgit? I don’t think so.
While the suggestion may have its merit when world oil prices have stabilised and that there is a pressing need to subsidise fuel, now is not the time.
Sarawak, while rightful to its natural resources and now regulates it through PETROS, we cannot be selling our fuel at pennies to the dollar. The current subsidised rate of RON95 is more than reasonable as most would agree in today’s circumstances.
To the suggestion, as Sarawakians would say, paloi (foolish). That is just what it is.