Govt to spend RM 40 Billion in Subsidies this year.
"It is true for every US$1 increase in the price there is a net inflow"
CYBERJAYA, April 17 — Second Finance Minister Tan Sri Nor Mohamed Yakcop said today the government will spend RM40 billion in total subsidies this year.
"It will be more, the subsidy will be RM40 billion or higher," he said, with the fuel subsidy accounting for RM18 billion.
"The fuel subsidy that we take out from the budget and give to the (oil) companies and the people will be RM18 billion compared to RM7 billion or RM8 billion last year. That doesn't include Petronas (and) foregone tax," he told reporters after the symbolic handing over of keys to owners of Biz Avenue 1, NeoCyber in Cyberjaya.
On whether the current increase in oil prices benefit the country on balance, Nor Mohamed said: "It is true for every US$1 increase in the price there is a net inflow. It is certain that we will earn more in net terms, but that is only looking at the crude oil side.
"In the longer term, there is the effect of high oil prices on recession in other countries and this in turn has a negative effect on our exports. Although we are diversified, we still export to some developing countries. In the long run, it is not going to be very positive."
Therefore, he said, the government is looking at it on a longer term basis and "we wish that the prices will be more stable." — Bernama
Point to Ponder by Malaysia Blogger
(Malaysia Alternative Voices - The followings were only the personal opinion of the author of Malaysia Alternative Voices, reader are advised to use their own judgement and intelligent to analysis the following comment and notes highlighted)
To a lot of common people, the subsidies of RM 18 Billion is a lot of money but then
(1) Malaysia is an Oil Production Country
- meaning is the world Oil Price increases, Malaysia net income from the sales of oil will also increase. This is also acknowledged by Second Finance Minister Tan Sri Nor Mohamed Yakcop that "It is true for every US$1 increase in the price there is a net inflow"
(2) The subsidies from Govt to be enjoyed by the people (Rakyat) is only a small portion from Petronas profit or Taxes paid by Petronas to the Government of Malaysia
2007 March - Petronas Financial Report
Petronas Profit Before Tax = RM 76.3 Billion
Net Profit = RM 46.4 Billion
Taxes alone from Petronas = RM 29.9 Billion
Refering to the following sources
What do these means
The RM18 Billion of fuel subsidies is only 23.6% of Petronas Profit before Tax
The RM18 Billion of fuel subsidies is only 38.8% of Petronas Net Profit
Even if the Government claim that Petronas Profit does not belong to the Government, taxation paid by Petronas alone amount to RM 29.9 Billion which is much more that what Government is subsidising for the People (Rakyat)
So why the Government keep on saying that with Government Subsidy on fuel, the Country is going to go bankcrupt?
So why is the government saying there is not enough money for development if the government subsidies for fuel? It is only a small portion for the Tax received by the Government from only 1 companies in Malaysia.
If the WORLD FUEL PRICES INCREASE, petronas REVENUE will then INCREASE resulting HIGHER PROFIT for Petronas and HIGHER TAXES receiveable by the government. Thus isn't it reasonable that FUEL PRICES INCREASE, SUBSIDIES SHOULD INCREASE ?
The next BIG QUESTION?
WHY IS OUR PETROL PRICE KEEP ON INCREASING WHEN THE WORLD FUEL PRICE INCREASES???
Malaysia Alternative Voices