Thanks to 1MDB, Petronas now enjoys huge reserves, says Najib

(FMT) – Days after two former ministers blamed 1MDB for Barisan Nasional’s defeat in the May 9 polls, Najib Razak has defended the state investment arm and says it indirectly helped Petronas increase its reserves.

In a Facebook post, the former prime minister said that for 15 years up to 2012, the national petroleum company was forced to subsidise gas that it supplied to independent power producers (IPP).

This led to Petronas incurring losses of over RM10 billion every year.

However, Najib said, a little over six years ago, 1MDB took over many of the IPPs and became the second largest IPP company in the country. This, he said, allowed the government to initiate open tenders for IPP agreements.

1MDB, the former finance minister said, subsequently became the lowest bidder for every new power purchase agreements (PPAs) or those that were reviewed.

This, Najib said, led to many bidders reducing their prices and eventually resolving issues related to lopsided deals in the past.

He said after 2012, rates for gas supplied to IPP were increased in stages and allowed Petronas to reduce losses incurred from its gas subsidies to between RM1 billion and RM2 billion every year from RM13 billion to RM15 billion a year previously.

At the same time, Najib said, Tenaga Nasional Bhd did not have to pay steep rates to IPPs and this led it to generate profit every year.

“It is ironic that people accused me of stealing through 1MDB when the facts show that both Petronas and TNB benefited RM20 billion every year, which was the losses that Pakatan Harapan had often highlighted previously.”

A couple of days ago, former youth and sports minister Khairy Jamaluddin and former culture and tourism minister Nazri Aziz blamed the scandal-plagued investment fund for the coalition’s poor performance in the general election.

Both Khairy and Nazri were responding to a news report from an English daily which quoted Najib as saying that BN lost because of “fraud, defamation and false promises made by Pakatan Harapan” during a session with his social media followers.

Najib, however, clarified that he never discounted 1MDB’s impact on the coalition.