Don’t exploit Petronas funds, Najib advises PH govt

Former PM criticises the PH government’s plan to meet the shortfall from removal of GST by taking advantage of the national oil company’s reserves.

Najib says taking more money from Petronas was unsustainable and risked sacrificing the country’s long-term well-being for the sake of short-term financing.

PETALING JAYA: Former prime minister Najib Razak has urged the Pakatan Harapan (PH) government not to exploit Petronas’ reserve funds to offset losses due to the zero-rating of the goods and services tax (GST).

He said this approach was unsustainable and risked sacrificing the country’s long-term well-being for the sake of short-term financing.

“I appeal to the new government to continue giving Petronas adequate space and resources to keep fulfilling our vision and not exploit its funds with ‘bailouts’, as was done during Tun Mahathir’s previous 22-year administration,” he said in a Facebook posting today.

Najib, who is also the former finance minister, was referring to Prime Minister Dr Mahathir Mohamad’s previous rule from 1981 to 2003.

He said profits made by the national petroleum company were dependent on global oil and gas prices which were beyond its control, and the government should therefore avoid being too reliant on taking advantage of the high oil prices.

Yesterday, Bangi MP Ong Kian Ming, who is a special officer to the finance minister, said the government would seek to boost revenue from higher corporate taxes, most likely from Petronas, due to the increase in global oil prices.

He also said zero-rating of the GST would result in a shortfall of RM21 billion in revenue a year.

Najib criticised the move, saying Petronas, Khazanah Nasional Bhd and Bank Negara Malaysia were making high dividend payments to the government.

He said Petronas’ reserves had risen by RM36.5 billion since the end of 2017 to a total of RM164.7 billion in March this year.

“Petronas’ cash reserves are now far higher compared to 2008 when I began my duties as finance minister,” he said

He said the increase was made in the wake of encouraging oil prices and payments from Aramco Saudi’s investment in the Refinery and Petrochemical Integrated Development (Rapid) project in Pengerang, Johor.

“During my administration, I was very meticulous in ensuring Petronas did not have to pay dividends to the government more than what was needed.

“This was because I wanted to ensure that the cash balance was enough to fulfil Petronas’ expansion plans in primary and downstream business sectors.”

He said Petronas’ funds increased significantly and it was able to make investments that resulted in high dividends, such as in the Rapid, Sabah-Sarawak Integrated Oil and Gas, and Sabah Ammonia Urea projects, as well as in major upstream projects in Malaysia, Canada, Iraq and Brunei.

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