Oil-producing Sabah leaders slam govt price hikes, review royalty

Wong Choon Mei, Malaysia Chronicle

Even as Second Finance Minister Ahmad Husni tries to defend a slew of subsidy cuts, more brickbats are pouring in for his boss Prime Minister Najib Razak for trimming RM750 million off the government’s expenditure list by raising the prices of essentials sugar, cooking gas, petrol, diesel and LPG.

Among those leading the charge were Sabah PKR leader Ronnie Klassen, who warned the move would unfairly burden East Malaysians, many of whom are already struggling to stay above the poverty line.

“The will be a multitude of negative impacts to our daily lives not just in terms of food, drinks and transport. The price rises are for strategic items and will have spillover effect into other essential goods and services. Inflation, which is already bad, can only get worse,” Ronnie told Malaysia Chronicle.

“But what hurts us most in Sabah and Sarawak are the hikes in fuel because we are oil producing states. How can the Prime Minister ignore this and the fact that Sabah and Sarawak are still the least developed and the poorest states despite our oil revenues? It really looks like we must begin to demand for higher than the 5 percent royalty that they now pay to us for our oil.”

Hitting on the weakest line of defense

On Thursday Najib, who is also finance minister, had announced a five-sen price increase for RON95, the mostly commonly used grade of petrol, and for diesel as well. He also put the higher-grade RON97 on a managed float that will subject it to price fluctuations in the market.

LPG was raised 10 sen to RM1.85 per kg, while sugar was also hiked by 25sen to RM1.75 per kg. Cooking gas was increased by RM1 to RM18.50 for the 10kg cylinder, by RM1.20 to RM22.20 for the 12kg cylinder and by RM1.40 to RM25.90 for the 14kg cylinder.

According to Ahmad Husni, the government had to act because it needed to restructure the economy and transform Malaysia into a high-income nation. He assured the savings from the subsidy cuts would be spent on the National Key Results Areas and the 12 National Key Economic Areas.

"Although in the beginning the proposed subsidy reduction was much bigger, the Cabinet decided that it must minimal, taking into account the people's well-being. They understand the situation and the fact that peoples in other countries are paying more for the same items," Bernama reported Husni as saying.

But he failed to satisfy his critics. They lambasted him and Najib for picking on the low-income groups and protecting firms with links to the Umno elite such as the toll road concessionaires, the independent power producers and the big-time construction players.

"What sort of BN government is this? The hike is like an ambush! It should have been discussed in Parliament and not just announced unilaterally by the BN alone," Shah Alam Mp told Malaysia Chronicle.

"The biggest losers are lower-income people and we demand to know why is Najib picking on them? Why can’t he take from the rich companies, do some real restructuring of the economy instead of going after the weakest line of defense.”