Petronas Profit FYE March 2006

This bit of news probably won't make the Malaysian papers... cause it has been barred???!! But, the irrepressible Dr. M has revealed Petronas' profit figures. As a state-owned unlisted entity, Petronas is at no liberty to reveal financial figures. However, Dr. M happens to be Petronas adviser, so... Anyway, Petronas recorded a record pretax profit of about RM80 billion (US$22 billion) for FYE March 2006. Last year's pretax profit figure was a paltry RM58 billion (and a net profit of RM35.6 billion).

Naturally, Dr. M's deliberate revelation has a lot more to do with making things tough for "you-know-who". The recent fuel price hikes did not go down well with most Malaysians, although most know that we cannot live with a heavily subsidised fuel policy forever ... many cringe at the mega profits registered by Petronas (the oil does not belong to the government... it belongs to the people).

Last year Petronas paid RM31 billion in taxes, dividends and royalties to the Malaysian government. The figure should be a lot higher this year since Petronas has registered a 37.9% jump in pretax profits. The fuel price hike was to save RM4 to RM5 billion a year in subsidy - that is OK, but shouldn't that come from Petronas?!! I mean, you can remove the subsidy so that we can learn to live with "market prices" but give back to the people via lower car prices or special dividends. The public should not be made to shoulder the burden alone, especially when the industrial side did not see a similar removal of subsidy quantum.

While I am not a fan of Dr. M, the handling of the fuel subsidy and Petronas gains by the government could have been a lot better.