KUALA LUMPUR: Petroliam Nasional Bhd (Petronas) should not be forced to shoulder the government’s financial burden amid lower crude oil prices, said independent think tank Institute for Democracy and Economic Affairs (Ideas).
Ideas chief executive officer Wan Saiful Wan Jan said there was an urgent need to reexamine the government’s grip on Petronas’ finances to ensure the national oil company’s long-term viability.
“Petronas should not be forced to pay for the government’s inability to balance the country’s budget. That is not the way to treat a successful and important company,” Wan Saiful said in a statement yesterday.
He said the only way to safeguard Petronas’ funds is by making Petronas more independent from the government.
“Regardless of the historical baggage, we have reached a time when professionals should be allowed to manage Petronas without political interference,” he said.
Wan Saiful was responding to Finance Minister II Datuk Seri Ahmad Husni Hanadzlah’s statement that Petronas did not have the authority to decide the amount of contribution it should make annually to the government.
The minister said the government, as the owner of Petronas, had such authority to decide the amount.
Wan Saiful said: “While (Ahmad) Husni’s statement is correct, it is also very worrying. Forcing an important entity like Petronas to make too high a contribution will impair Petronas’ own ability to grow and to be sustainable as a business venture.”
Ahmad Husni made the comments after Petronas indicated last month the potential decrease in its contribution to government coffers from RM68 billion to RM43 billion. The contribution comes in the form of dividends, tax and royalties.
Petronas’ forecast came amid a decline in crude oil prices, which raised the spectre of lower earnings for the company, besides higher government budget deficits.
This article first appeared in The Edge Financial Daily, on December 12, 2014.