I REFER to your report “Najib: No choice but to revise fuel subsidy” (NST, May 25) where it was reported the government will review its fuel subsidy as the global crude prices had pushed subsidy costs beyond its budget for development programmes.

Deputy Prime Minister Datuk Seri Najib Razak was reported to have said the increase in oil prices had left the government with no choice but to revise the fuel subsidy.

It was also reported that the government’s bill for fuel subsidy was expected to exceed RM45 billion as crude oil prices rose to above US$135 a barrel on May 22.

A review of the fuel subsidy in light of rising oil prices would mean a rise in petrol, diesel and natural gas prices.

Natural gas will still be the cheapest option for motor vehicles. Malaysia is blessed with large reserves of natural gas, expected to last till 2035.

However, the number of petrol stations with pumps supplying natural gas in the country is inadequate to meet the demand of natural gas-powered vehicles, particularly taxis.

A taxi has to fill up on fuel an average of three times a day. The waiting time is between 20 and 30 minutes each time. This works out to 60 to 90 minutes wasted per day — time that could be spent earning money.

If more petrol stations sell natural gas, private car owners may switch from petrol to the cleaner and cheaper natural gas, resulting in reduced cost of fuel subsidies. The money saved could be channelled to increasing food production.

Singaporeans are enjoying cheaper fuel in the form of piped natural gas from Kemaman as a result of a long-term agreement signed in the 1990s between the Malaysian and Singapore governments. Japan, too, benefits from the cheap natural gas from Malaysia.

When there is a shortage of rice, traditional rice exporting countries stop exporting rice to ensure adequate supplies at affordable prices for their citizens. With the worsening oil crisis, why not ensure an adequate supply of natural gas for Malaysians first before exporting it?

Source: NST – May 27, 2008