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Exempt Sabah, Oil States From Fuel Hike- Jeffrey

Kota Kinabalu:     “Sabah and the other oil producing States should be exempted from the recent fuel price increase to avoid further damage to their local economies and preventing additional burdens on the already suffering people” said Datuk Dr Jeffrey Kitingan, Chairman of STAR Sabah, in a press statement released today.

“There is no justification for the people of the oil producing States to be further burdened with fuel price increases when Petronas and the federal government is illegally taking 95% of the oil revenues from these people” added Dr. Jeffrey, who has been a strong advocate for the return of the oil rights to the oil producing States particularly Sabah and Sarawak.
The people in Sabah and Sarawak are already burdened with higher costs due to the unfair and unjust cabotage policy which the federal government has so far refused to even review despite all-round calls for its abolishment.

The price hike has brought immediate price multiplier effects in other products the past two days in Kota Kinabalu.  Going by these price increases, the knock-on domino effect of the fuel hike on the inflation in Sabah will be more than 10%.   From the people’s feedback, noodles have increased by as much as RM1.00 per bowl and even traditional “kueh” in the Kota Kinabalu market has increased by RM0.05 to RM0.45 per piece, both increases being more than 10%.

The 4 oil producing States, Sabah, Sarawak, Terengganu, Kelantan, are amongst the poorest States in Malaysia with Sabah being the poorest.   Yet, in 2012, Sarawak contributed some RM40 billion and Sabah RM18 billion to the coffers in Petronas from which the federal government gets taxes of more than RM27 billion and another RM30 billion in special dividends.

The federal government needs to be fair in their treatment of the oil producing Borneo States and implement solutions to alleviate the high costs of living while their rich resources and plundered and siphoned to benefit the Peninsula. 

One of the best solutions is to establish a two-tier subsidy system for fuel with lower prices for fuel and petroleum products in the oil producing States.  The diesel quota for Sabah is 74 million litres per month, a RM0.20 increase will only “save” the federal government RM14.8 million.   Assuming a similar quantity of RON95 usage in Sabah, the annual “savings” from the RM0.20 increase is only a miserly RM355.2 million compared to the RM18 billion contribution from Sabah.  On the other hand, the RM0.20 increase will cause billions of untold damage to the Sabah economy and upheavals in the daily budgets and lifes of the ordinary people.

Looking from other angles, the disparity and unfair treatment of Sabah is more obvious.  In January 2011, the Chief Minister reported that Sabah produced 26.9% of the then 637,000 barrels per day (bpd)output of Malaysia.   This works out to 171,353 barrels or about 35 million litres per day.  The 74 million monthly quota is only about 2 days of Sabah’s crude petroleum and will be less than a day’s production when Sabah triples it oil output to about 500,000 bpd in another year or so.

On natural gas, Sabah and Sarawak produces more than 90% of Malaysia’s production.  Yet, for the usage of the very same gas from Sabah and Sarawak, the Independent Power Producers (IPPs) in the Peninsula get an annual RM19 billion subsidy so that the consumers enjoy a lower electricity tariff while the people in Sabah and Sarawak enjoy nothing in return from its natural gas.   If only RM1.0 billion of the subsidies were to be given to SESB and consumers in Sabah, 833,333 households will enjoy RM100.00 of free electricity per month for a year.   Such is the unfair treatment of Sabahans.

If the Proton national car is produced in the Peninsular and sold at a higher price in Sabah, there is every reason why the federal government must implement a lower price for petrol, diesel, petroleum and natural gas products in Sabah.

At the same time, the leaders in Sabah, regardless of their political affiliation must take all necessary steps to safeguard the interests of Sabahans and insulate them from unjustified burdens arising from the fuel increase.  The Sabah government need to object to the recent fuel increase and demand its exemption for Sabah.

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