Petronas has never subsidized petrol and diesel!!!

I would like to share this article (email) which i received from a source that i can't reveal at this moment. I hope we can gain something out of it.

Subject: Fw: Petronas never subsidized petrol and diesel!

As an employee of Petronas, I think I have to share this in order to help to correct the people’s understanding on the issue of Petronas subsidizing the petrol and diesel.

I would like to clearly stress that Petronas has never subsidized the petrol. The practice is each year, Petronas paid a very huge amount of money to the government in term of government taxes, dividends, royalties and duties but none is paid to subsidize the petrol! The money paid by Petronas (as mentioned above) is then partly used by the government to subsidize the petrol for Malaysians (the decision is made by the government not Petronas).

So it is not fair if people start pointing their fingers to Petronas saying that Petronas is using people’s money. The portion which is belong to the government is channeled to the government each year and what is left is the money that is hardly earned by Petronas. Please bare in mind that Petronas income is not only from its operations in Malaysia but most of it profit is generated from its’ global investment.

I have this question to ask all Malaysians, if you run a company and you invest overseas (it maybe in term of oil drilling, management and consultation services, etc.), the profit that you earn from this foreign investment, does it belongs to the country? To the Malaysian? or does it belongs to the company?

As for the NGV price, as clearly mentioned by CEO of Petronas, YB Tan Sri Dato Hassan Merican, the NGV price is subsidized by Petronas and not by the government (it is a opposite situation compared to petrol & diesel). Petronas is the only NGV distributor in Malaysia, it is not because Petronas monopolizes the market but because other competitors such as Shell and Exxon Mobil is not interested to invest in it. This is because it is not worth an investment since it is very costly. The market price of NGV should be RM2.68 per liter if it is not subsidized by Petronas, and now Petronas is contributing RM2 per liter so that people can still buy NGV at the price of about 68sen per liter.

But from my point of view, as the demand increases, (we only have about 30000+ NGV user now), maybe after the next 5 or 10 years the number of users will increase to 1 million users(assuming). Then there will be another issue, because surely the cost price of NGV has gone up and, will Petronas be able to subsidize RM2 per liter for 1 million users? And you have to multiply it with how many times the users refuel their NGV tanks each month.

A simple calculation will be, if 1 million user refuels their NGV tank 4 times a month and each tank capacity is 10 liters ;

1 month x 4 tanks (assuming 10liter per tank) of NGV

= 40liters x 1 million users (assuming after next 5 years)

= 40million liters permonth x RM2 (subsidize amount per liter)

= RM80million permonth!

And that will be RM960million of subsidy per year!!!

Will Petronas be able to subsidize it or should it be the governments responsibility?

So the issue now is how can we minimize the petrol, diesel and NGV price AND how can we increase the Malaysians per capita monthly income.

The issue is not why Petronas did not subsidize more when the price goes up, because logically when Petronas’ profit increases due to the oil and gas price increment in global market, then the amount of cash paid to the government in term of government taxes, dividends, royalties and duties should also increase! And it is the government’s decision whether they want to subsidize more or not! Petronas has done their part in contributing to the nation and now it is up to your elected leaders to decide.

Please do not blame Petronas. We at Petronas are getting negative comments and harsh words from the Malaysians, and none of the Malaysian leaders stood up to correct the people’s understanding on Petronas’ role in the Malaysian petrol price control.

We at Petronas do not enjoy any discounts when we purchase petrol like other oil & gas companies are doing. (I know Shell have discount cards for their staff). Petronas staff pay the same amount of RM2.70 per liter when we purchase petrol at Petronas pump stations. Please correct the people understanding that Petronas staff buy petrol at a discounted price.

People think that Petronas is still a government agency, that is true maybe 30 years ago but not now. We at Petronas work really hard to achieve Petronas’s aim to be a global champion. The Petronas vision to be “a leading oil & gas company of choice” is not an easy task to take and it is really a burden for us in Petronas. The reason we are still here today is because we believe we have to right resources and ability to be a global champion. I have been working outside of Petronas for about 8 years before I joined Petronas. If I used to say my previous job load is very busy but at Petronas you have to multiple it by 4. It is 4 times heavier from my previous job load!!!

This what people don’t see, they think Petronas work culture is similar to the government agencies in Putrajaya. If we at Petronas work like that then by 2010 will be no more petronas!!

So, please spread this clarification in order to correct the people’s understanding.

Thank you