Kluang MP Liew Chin Tong said it would be unfair for Malaysians if a sales tax was imposed when crude oil prices had fallen below the current pump price. – The Malaysian Insider file pic, November 1, 2014.
As global crude oil prices continue to tumble, a DAP lawmaker has said Putrajaya must commit itself to reducing the price of RON95 petrol in the country.
Kluang MP Liew Chin Tong said Putrajaya must make clear how it will deal with an opposite trend in crude oil prices in a way that will be fair to ordinary Malaysians.
"Budget 2014 assumed that the crude oil price would be at US$110 per barrel while Budget 2015 assumed that it would be at US$105 per barrel. The current price hovers around US$80 to US$85 per barrel.
"While declining oil prices reduce the subsidy bill, the government's revenue will also fall because at least 30% of it comes from petroleum-related revenue through Petronas.
"But Putrajaya must also not impose a petroleum sales tax to fill the revenue gap resulting from smaller petroleum-related revenue from Petronas," he said in a statement today.
Liew said Prime Minister Datuk Seri Najib Razak, who is also finance minister, should also overrule his deputy Datuk Ahmad Maslan on imposing petroleum sales tax if global oil prices fall.
He said it would be unfair for Malaysians if a sales tax was imposed when crude oil prices had fallen below the current pump price.
"Najib must categorically reject that option now," he said.
Liew was commenting on Ahmad who had said that the government could choose to reduce the price of RON95 if the global crude oil fell to as low as RM1.72 per litre and impose a sales tax of 58 sen.
Ahmad said a second option would be that the government reduce the petrol price to RM1.72 based on world market and not impose sales tax, which would cost the country revenue for development.
Liew, who is Johor DAP chairman, said even without tax, the price of RON95 petrol was at RM2.30 per litre.
"Ahmad said the problem now will be getting back the RM23.5 billion last year and RM21 billion this year paid to petroleum companies to enable us to reduce the price of petrol.
"The whole debate shows that the government is living in its own world as far as economic management is concerned."
Liew also took a dig at the tiered subsidised petrol scheme the government is mulling, which would have people earning RM10,000 and above paying the full petrol price without subsidy.
"It is a joke when just days ago the finance minister, second finance minister and deputy finance minister were still thinking about a tiered subsidised petrol scheme.
"It will only benefit the crony that devised the messy scheme," he said.
On Monday, Second Finance Minister Datuk Seri Ahmad Husni Hanadzlah announced preliminary details for a new three-tiered fuel subsidy scheme that would benefit only the lower-income group
Those earning RM5,000 to RM10,000 will get partial subsidy for petrol, while those earning less will enjoy full subsidy.
Earlier this week, Najib reportedly said the new fuel subsidy scheme would be enforced mid-2015 for RON95, and slightly earlier for diesel.
He said the scheme was still at a “request for proposal” stage and that the government was still looking at proposals to determine the best package to be implemented.
He said the public would be fully informed before it came into effect.
- TMI
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