We’ll ensure Petronas returns to profitability, says finance minister

Finance Minister Tengku Zafrul Tengku Abdul Aziz says the government does not rely only on Petronas’ dividends as these account for less than 20% of its revenue.

KUALA TERENGGANU: The government is committed to ensuring that Petronas returns to profitability but global oil prices will be key, Finance Minister Tengku Zafrul Tengku Abdul Aziz said today.

The loss announced by Petronas two days ago was due to the fall in oil prices in the second quarter but they had since risen, he noted.

“If I am not mistaken, in March and April (Brent crude) oil price fell to US$20 per barrel. At least now there is an increase (in oil prices) in the global economy.

“The projected oil price this year is about US$40 per barrel, so the projection is still within our range,” he told reporters here today.

Tengku Zafrul was commenting on Petronas’ announcement on its net loss of RM21 billion in the second quarter ended June 30, due to huge impairments on assets and weaker oil prices, against a profit of RM14.7 billion in the same quarter last year.

It was the first quarter the national oil and gas company had recorded a loss since the fourth quarter of its 2015 financial year.

Tengku Zafrul, on a two-day official visit to Terengganu from yesterday, earlier paid a courtesy call on Terengganu Menteri Besar Ahmad Samsuri Mokhtar.

The minister said although Petronas did not make a profit, Terengganu will still be getting its share of oil royalties in September as decided by the government, but the amount still needs to be refined due to the current situation.

He said the loss suffered by Petronas, however, would not affect the country’s development as the government has undertaken several initiatives to stabilise the economy and generate revenue.

“We will still be spending, especially for development … that is why our fiscal deficit will increase. The country’s deficit is expected to increase, with the implementation of Penjana (the national economic recovery plan), to 5.8-6% from 3.4% last year.”

He reminded that the government does not rely only on Petronas’ dividends as these account for less than 20% of revenue.

According to Tengku Zafrul, the people have received benefits worth RM767 million under the Prihatin Rakyat Economic Stimulus Package (Prihatin) while its entrepreneurs received benefits worth RM257 million under Penjana.

“In terms of strengthening the state’s economy, the federal government has channelled assistance worth RM3.8 million through small projects.

“We have also discussed various measures that can be taken up with the federal government to further boost the state’s economy, especially to offset the Covid-19 (economic impact),” he added.

While his visit to Terengganu was mainly to meet representatives of tourism and other sectors affected by the pandemic, Tengku Zafrul said he also wanted to ensure that the federal government’s 2021 Budget measures would reach the target groups transparently and quickly.

“For example, Terengganu is rich in natural resources, cultural heritage and natural environment. It has great potential to continue to be developed. This potential will be explored together through discussions with stakeholders,” he said. - FMT