Fuel subsidy is about well-being

Energy Minister at PMO tells CCTV: Whatever we do with it, it will not (adversely) affect low-income people

SUFFICIENT transport infrastructure has to be in place before the Brunei Government would consider modifying fuel subsidies to cater only for income groups "who really need it", the Minister of Energy at the Prime Minister's Office said yesterday.

Pehin Datu Singamanteri Colonel (Rtd) Dato Seri Paduka Hj Mohd Yasmin Hj Umar explained that the introduction of these "smart subsidies", in the event they would be considered, would be influenced by other factors such as the adequate provision of public transport and the country's venture into alternative energy.

The Energy Minister made these remarks during an interview yesterday with correspondents of China Central Television (CCTV) Asia-Pacific at the minister's office in the Bahirah Building in Berakas.

The CCTV correspondents questioned the sustainability of Brunei's high fuel subsidies, pointing out that a bottle of mineral water here costs more to the people than buying the same amount of oil, which they said led to traffic jams and the high ownership of cars.

"Water is more expensive than oil. It's a joke in China, but here it is a fact," the CCTV correspondents said.

In explaining the matter to the foreign news agency, Pehin Dato Hj Mohd Yasmin said that subsidies were designed with the benefit of the low-income groups in mind and was thus, a "sensitive" topic.

"The fuel subsidy is designed to make sure the basic necessity of transportation is being met without actually affecting the lower income people," the minister said.

"Of course, the government will revisit the subsidy (issue) from time to time. But it will always be under our principle: Whatever we do with the subsidy, it will not (adversely) affect the low-income people," he added.

"Whether in future we will have some sort of smart subsidy which targets only those people who really need subsidy that will be evolved from time to time."

Pehin Dato Hj Mohd Yasmin stressed that the suggestion of the modification or even removal of fuel subsidies was a multi-faceted issue, requiring proper infrastructure for public transport, among other factors, to be in place before such decisions can be made.

"You cannot just look at one aspect of it. You have to look at the current state of our public transport infrastructure... You have to look at the necessity for the low-income people to make use of the transportation. You have to look at all these issues. It's not just one area, just because 'there are traffic jams, too many cars on the road, then let's cut the subsidies' is (not) the answer," the minister said.

"At the end of the day, the well-being of the people is also the priority for the government."

With regards the supply of oil itself, the Energy minister said Brunei has a strict policy in maintaining its hydrocarbon resources, always ensuring that the reserve replacement ratio was greater than one.

"Which means that for every barrel of oil that we take from the ground, it can only be done when we know there is another barrel down there," he said. "That's the standard. It's not easy to achieve but we do this to have sustainability."

A study completed last year by national think-tank Centre for Strategic and Policy Studies (CSPS) found that Brunei had 17 years and 30 years supply of crude oil and natural gas, respectively, based on its existing reserves.

However, the minister noted that exploration work on the new concession blocks CA1 and CA2, which cover an area larger than those of the existing blocks, will begin this year.

"Our answer to you is that we have a sustainable energy policy for the future," he said.

While in pursuit of finding new hydrocarbon reservoirs for the country, Brunei was also "very keen" in its venture into alternative energy sources.

With solar technology already being tested in the Sultanate, the minister shared with CCTV that Brunei was also looking into the possibility of "mini-hydro" and wind power technologies. He added that studies in this respect were still in their "infancy" and needed to be explored further.

The establishment of an energy institute in Brunei, which will invite foreign experts to join the institute's advisory board, will contribute to the country's alternative energy development, apart from researching further on "fossil-based" resources.

The CCTV team are in Brunei to showcase the country to viewers back home and will be here until February 10. They are hoping to secure further interviews with other ministers here to get an in-depth view of Brunei as well as showcase how Chinese families celebrate the Lunar New Year here.

The Brunei Times