By Wan Saiful Wan Jan. First published on 11 DECEMBER 2014
On 29 November 2014 Petronas issued a statement on the potential decrease of its contribution to the government’s coffers in the form of dividends, tax and royalties from RM68 billion to RM43 billion.
Responding to this, Dato’ Seri Husni Hanadzlah, Minister of Finance II, said that Petronas does not have the authority to decide the amount of contribution they should make annually. He added that such authority lies with the government as the owner of the national oil company.
While 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’s own ability to grow and to be sustainable as a business venture.
To ensure Petronas’ long term viability, there is an urgent need to re-examine the government’s grip on the company’s finances. Petronas should not be forced to pay to for the government’s inability to balance the country’s budget. That is not the way to treat a successful and important company.
The only to way to safeguard Petronas’ funds from the sticky fingers of politicians 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.
Wan Saiful Wan Jan is the Chief Executive of IDEAS