Sunday, February 12, 2017

Move to allow petrol companies and kiosks to compete will benefit consumers and is long overdue

Bernama reported last week that the Second Finance Minister, Dato’ Seri Johari Abdul Ghani said the government is studying the option of setting a ceiling price for petrol in view of the escalating cost of fuel.

He added that "It is up to the government to set a ceiling which is deemed fair for all. When the government has decided on the ceiling price, whether they (O&G industry players) want to sell the oil at lower prices for promotional purposes, we leave it to them.”

We fully welcome the above move as it is long overdue. Malaysians do not understand why petrol companies in Malaysia are not allowed to sell petrol prices at lower prices when they could see how kiosks in Thailand or Singapore can compete and lower pump prices.

When I asked the above question in Parliament several times, the only response I had once in 2009 from the then Deputy Minister of Domestic Trade and Industry, Datuk Tan Lian Hoe was that allowing petrol stations to compete with different prices “would confuse consumers”.  It appears that Malaysians consumers are much more easily confused compared to our overseas counterparts.

We can understand if the Government sets a maximum price these companies can sell petrol so that Malaysians will not be unfairly over-charged.  But we don't see the logic of not allowing the companies to compete and transfer their cost efficiencies to us via lower fuel prices. This is especially since the Government has already abolished fuel subsidy more than a year ago.

The only reason we could think of was that the Government is merely trying to protect the weaker players at the expense of the consumers.

As publicly discussed over the past weeks over the fuel price hikes, the petrol price is calculated based on the average monthly price of refined fuel as measured by Means of Platt Singapore (MOPS). However, petrol companies don't purchase their fuel at these “average” prices. They will all try, with varying degrees of success to acquire their supply of petrol at the lowest possible price during the month or even the year.

In addition, some petrol companies are obviously more efficient than others and have lower operating and investment costs.

Therefore, why shouldn't these companies who purchase their stock at cheaper prices and are more cost-efficient be allowed to pass on some of their savings to long-suffering Malaysians?

Hence we call upon Dato' Seri Johari Abdul Ghani to free up the competition as soon as possible and not wait until petrol prices go up further in the coming months.

In fact, under the new regime, the competition between petrol companies and kiosks must be regulated under the Competition Act by the Competition Commission of Malaysia. This is to ensure that there will be a level playing field and the petrol companies and kiosks will not collude to fix prices at the expense of ordinary consumers.

Saturday, February 11, 2017

Instead of making the Ministry of Communications and Multimedia the bastion of truth and integrity, Datuk Seri Salleh Keruak has made it the Ministry of Fake News and Miscommunications

There cannot be greater irony when the Minister of Communications and Multimedia, Datuk Seri Salleh Keruak warned in his blog exactly a month ago against posting “fake news”:
I’ve said this before and I will say it again – verify before you vilify your source of news information. It is very unfortunate to know that many people still cling on to mistaken beliefs and theories that could even be decades old!  
Fabricated news stories and irresponsible online news sources spread misinformation in order to mislead and/or make money when others click on the site or article. This makes fake news much more insidious than real news.  
According to an analysis by BuzzFeed, a leading independent digital media company, hoaxes about the US politics were among the top-performing fake news content on Facebook in 2016. BuzzFeed News Media Editor, Craig Silverman said that twenty-three of the 50 top-performing fake news hoaxes found on Facebook, were focused on US politics.

However, the Minister seems to have picked up a different lesson from the above analysis that he cited.  It appears that the prevalence and popularity of “fake news” which helped President Trump with the American elections is the exact approach he would take to help Dato’ Seri Najib Razak defend his kleptocratic administration.

Two days ago, I have countered Datuk Seri Salleh’s attempt to shrivel 1MDB’s scandal into a peanut-sized RM1 million.  The Minister even presented the alternative fact that 1MDB was in possession of RM51 billion in assets and hence is a healthy “going concern”.

I’ve detailed the Auditor-General’s findings that the Federal Government has guaranteed, directly and indirectly, RM39.8 billion of 1MDB’s monster debts of which the Ministry of Finance wholly-owned subsidiary has no ability to repay.

I’ve also cited the fact that even 1MDB’s auditors, Deloitte have renounced the 1MDB March 2013 financial statements which provided the RM51 billion asset figure.  This was after various international agencies, including the US Department of Justice (DOJ) provided documents demonstrating that at least US$5.6 billion have been stolen and laundered from 1MDB via fraudulent transfers and fake companies.

Despite the Minister’s normally quick responses, Datuk Seri Salleh Keruak has failed to respond to the cited facts, much less provided any shred of evidence to counter the allegations.

Instead, the above only proved that the Minister has corrupted his position to become the official Ministry of Fake News and Miscommunications, consistent with many of his earlier statements defending the indefensible Prime Minister and 1MDB.

The award of the fakest news of all perpetrated by Datuk Seri Salleh Keruak has to be his continued insistence, even after the mountain of evidence presented by the US DOJ on US$731 million finding its way into Dato’ Seri Najib Razak’s personal bank account in Ambank, that “after comprehensive investigations by many authorities, it has been confirmed that the funds were a donation from the Royal Family of Saudi Arabia”.

The problem is, Datuk Seri Salleh Keruak is learning from the best, Nazi Hitler who wrote, “Make the lie big, make it simple, keep saying it, and eventually they will believe it.”  The Minister presented not an iota of proof to continue asserting that the siphoned funds actually originated from “the Royal Family of Saudi Arabia”.

It is the sacred task and duty of all right-thinking Malaysians to stand up for the truth and defeat the ‘big lies’ of the Najib administration to protect our country from crooked dictators, and ensure that our children do not pay for our indifference.

Thursday, February 09, 2017

Unlike DAP Parliamentary Leader Lim Kit Siang who believed that Dato’ Seri Salleh Keruak could be tutored by me on 1MDB, I believe that the Minister is untutorable because he can’t count

DAP Parliamentary Leader Lim Kit Siang asked me to tutor Dato’ Seri Salleh Keruak on 1MDB yesterday. This was in response to the Communicatioarns and Multimedia Minister’s incredible claim yesterday that the 1MDB scandal is only a puny RM1 million scandal compared to the BMF RM2.5 billion scandal.

I really would, if I could.

I now believe that the Minister is actually untutorable because he really cannot count nor understand simple accounting fundamentals.

This was after he insisted yesterday that he didn’t need any tutoring, that “1MDB's start-up capital was only RM1 million” and that debt-stricken company has “RM51 billion worth of assets to show for it plus ongoing development for the next couple of decades.”

Unfortunately, Dato’ Seri Salleh Keruak is spinning a story that even the CEO for 1MDB, Arul Kanda has stopped spinning since a year ago.  And it only goes to prove that he really doesn’t know what he is talking about.

Firstly, while the Government did inject only RM1 million in cash into 1MDB, that Government has provided direct and indirect guarantees to various lenders from whom 1MDB borrowed RM5.8 billion and US$7.73 billion (RM3.4bn), or a total of approximately RM39.8 billion.  The amounts, which have been verified by the Auditor-General as disclosed in the Public Accounts Committee Report on 1MDB included:
  • RM5.0bn – 30-year bond guaranteed by the Federal Government (2009)
  • RM0.8bn – 10-year loan from SOCSO guaranteed by the Federal Government (2010)
  • US$3.5bn –10-year bond guaranteed by IPIC, Abu Dhabi but indemnified by MOF Inc (2012)
  • US$3.0bn – 10-year bond backed by a “Letter of Support” signed by the Minister of Finance which effectively guaranteed the debt (2013)
  • US$1.0bn – Advance by IPIC to 1MDB, indemnified by MOF Inc (2015)
  • US$0.23j– Advance interest payments by IPIC on behalf of 1MDB, indemnified by MOF Inc (2015/6)

All the indemnities, direct and indirect guarantees above mean that should 1MDB fail to pay the above, then the Federal Government of Malaysia, funded by ordinary tax-payers are liable to pay for the RM39.8 billion of 1MDB borrowings.

The above does not yet include additional billions of borrowings by 1MDB which are not officially guaranteed by the Federal Government.  If Salleh Keruak doesn’t trust me or the Auditor-General with the above figures, he could perhaps request for tuition from Arul Kanda instead.

The question is, does 1MDB really have “RM51 billion worth of assets”, a figure Arul Kanda no longer cites and worse, a figure that 1MDB’s own auditors have publicly renounced, to pare down its debts?

Has Dato’ Seri Salleh Keruak completely forgotten the fact that much of the RM51 billion worth of assets have either been sold (at a loss) or worse, been proven to be misappropriated by the investigations published in the United States, Switzerland and Singapore?

The documents which have surfaced since the international scandal broke showed the following sums have been outrightly siphoned from 1MDB:

  • US$1.83bn – Investment in or with Petrosaudi, which was mostly misappropriated to Good Star Limited, a company owned by Jho Low (2009-2011)
  • US$1.367bn – Purported “deposit” paid a fraudulent Aabar set up in the British Virgin Islands (BVI) which has since been liquidated (2012)
  • US$0.855bn – Additional “deposit” paid to the same fraudulent Aabar in 2014
  • US$1.56bn – Investment by 1MDB “Global Investment” in fraudulent investment funds (2013)

The total of funds misappropriated and hence completely lost, amounts to US$5.612 billion or approximately RM24.7 billion!  These losses do not yet include losses arising from 1MDB various “real” business transactions like the acquisition of power plants and real estate, astronomical fees paid to Goldman Sachs etc.

And despite all of the above, Dato’ Seri Salleh Keruak still deemed 1MDB “a going concern”.  The Minister obviously do not understand what is the meaning of “a going concern”.  Does he not realise that 1MDB no longer has any income sources despite remaining tens of billions of ringgit in debt?  Even Deloitte has given up auditing the company, and 1MDB itself has failed to produce a single financial statement since March 2013.

I sincerely hope that Dato’ Seri Salleh Keruak is merely pretending to be stupid.  Because if he is really that stupid, then even Arul Kanda would give up on him.  In fact, the 1MDB CEO might just prefer that the Minister keeps his mouth shut to save himself, BN, 1MDB and the Government further outrageous embarrassment.

Thursday, February 02, 2017

No clarity, more obfuscation: BN Strategic Communications Team's lengthy answer on how the Government arrived at a painful 20 sen hike for February petrol prices

I had issued a statement yesterday demanding that Dato’ Seri Najib Razak explain exactly how the Government arrived at a painful 20 sen increase for petrol prices.

RON95 and RON97 prices went up by 20 sen to RM2.30 (9.5%) and RM2.60 (8.3%) respectively while diesel cost went up by 10 sen to RM2.15 (4.9%).

This follows from the already big hike Malaysians have experienced since January where all types of fuel already increased in price by 20 sen.

Malaysians deserve a straightforward answer from the Government because they cannot fathom why the prices of fuel was upped significantly even though global crude oil prices have declined over the past month. What’s more, the beleaguered Ringgit actually recovered marginally which should ease the price pressures further.

Instead of receiving any response from any responsible Minister, much less the Finance and Prime Minister, we got a reply from the “BN Strategic Communications Team”. We don't know who they are, or even know what is their capacity to respond on behalf of the Government.

Regardless, taking their response at face value, they failed to provide any clarity on how the Government arrived at the painful 20 sen quantum of hike. If they could write such a lengthy essay to rebut my simple question, why couldn't they just attach the spreadsheet to justify the increase?

It explained that the pump prices was calculated from the average refined oil prices as measured by the “Singapore Means of Platts” (MOPS), which is already a widely acknowledged fact.

However, all that was further relevant from the statement was a paragraph which said, “a check on the MOPS would show that the average price of motor gasoline 95 unleaded for January had stabilised in a range of US$69 to US$70 per barrel and was materially higher than the average price in December 2016 where the price had steadily increased from US$62 at the beginning of the month to US$68 by December’s end.”

If the BN Strategic Communications Team is so confident of the numbers, why did they try to obfuscate the statistics with a fuzzy range of numbers, instead of just providing the specifics to justify the 20 sen hike?

I did the BN Strategic Communications Team a favour by doing the calculation on their behalf.

The average MOPS95 price for December 2016 is US$66.553 per barrel or US$0.4186 per liter. That works out to RM1.8753 per liter at the then exchange rate of US$1:RM4.48.

MOPS95 averaged slightly higher at US$68.820 per barrel or US$0.4328 per liter in January.  In turn, it translates to RM1.9130 per liter (US$1:RM4.42).

Hence based on the exact explanation provided by the BN Strategic Communications Team, the difference in price is only 3.8 sen more for January.

If so, why did the Government increase by so much more at 20 sen?

Therefore, my question raised yesterday remains unanswered, and Dato’ Seri Najib Razak, as both the Finance and Prime Minister, must explain why the price of petrol has increased so significantly despite the above.

The Ministry of Finance must disclose if the Government is actually imposing hidden taxes on the consumers to cover up for Government budget shortfalls.

Once again, we call for the full disclosure of the data, formula and exact details on how the fuel price hikes are calculated so that Malaysians know exactly why they have been forced to suffer as a result of the Government’s policies.