Petrol price hikes show PM’s ministers removed from reality

Rafizi asks why have local petrol prices gone up when crude oil prices have gone down?

KUALA LUMPUR: The petrol price hike has proven that Cabinet ministers are removed from reality, said PKR secretary-general Rafizi Ramli.

In a statement today, Rafizi, who is also Pandan MP, said that the decision by Prime Minister Najib Razak and his administration to raise petrol prices 10 and 20 sen for RON95 and RON97 respectively was made in spite of the people already suffering from the effect of price hikes, especially following the implementation of the Goods and Services Tax (GST).

Rafizi questioned the odd contrast between Malaysian petrol price hikes and decreasing global crude oil prices, pointing out that in June prices had gone from USD66 a barrel to USD62 by the end of the month, and RON95 had in February been set at RM1.70 per litre despite global crude oil prices having dropped.

“This means that when global crude oil prices dropped towards USD60 a barrel at the end of June, RON95 prices should have dropped towards RM1.70. On the contrary, Dato’ Seri Najib Tun Razak’s administration raised RON95 prices in contrast to global oil prices,” said Rafizi.

He said that he had repeatedly stressed that Najib had to handle the ringgit’s decline against the US dollar immediately and effectively, because the decline had raised the prices of imported goods and resulted in the people being unable to enjoy the benefits of global crude oil prices dropping due to the ringgit’s low value.

“Although it isn’t the most dominant factor, the ringgit’s value falling has forced Malaysians to take on higher petrol and diesel prices,” Rafizi said.

Rafizi also went on to point out the additional burdens caused by tax-related decisions Najib had made, citing the hidden petrol and diesel taxes he had imposed early this year that had accumulated to about RM2 billion in three months, and collections from the GST that amounted to RM6 billion in just two months.

“This means that the taxes collected from all the citizens for the purchases of petrol, diesel and necessities for the first six months of the year have reached over RM10 billion,” he said.

“As such, I repeat my call for the government to maintain oil subsidies, even if it has to be in a different form and manner. Taking the rate of money values changing and other factors into consideration, I have suggested that the government needs to give subsidies of at least 30 sen per litre.”

He estimated that subsidies of 30 sen per litre would see the government paying around RM7 billion a year, and that if it was introduced by August, the Federal Government would only have to pay RM3 billion compared to the RM10 billion collected from taxes in the last six months.

“The Federal Government is financially able to support subsidies of 30 sen per litre, and the people deserve them having paid high additional taxes since early this year,” he said.