Petronas advisor agrees state should request for higher oil royalty, cautions against demanding too much
KUCHING: Petronas advisor Tun Dr Mahathir Mohamad yesterday agreed with Sarawak’s request
for increased percentage of oil royalty from the current five per cent, but said 20 per cent was too much.
“You should sit down with the Prime Minister and talk to him on (profit) sharing. But not 20 per cent, that’s too much. May be six per cent or more,” Dr Mahathir said in his keynote address at the International Energy Week 2015 (IEW’15) in Borneo Convention Centre Kuching (BCCK) here yesterday.
The answer from Dr Mahathir on the state’s request seemed to be the latest official response from Petronas to the state government’s request for higher percentage royalty last year.
The request was endorsed unanimously by the State Legislative Assembly (DUN) sitting in May last year.
Touching on federal government’s allocation to states, the former prime minister said the quantum for some of states which were really poor should be increased.
“The really poor states need more money than some of the richer states. That’s not equitable at the moment because some poor states get less money and the richer states get more money because it’s based on certain calculation.
“So it’s time that financial relations between states and federal should be looked into. I am recommending this because I am not the prime minister. So I will back you on that,” he stressed.
Asked to explain on why he thought that the state’s request of 20 per cent was too high, Dr Mahathir replied; “Well, that’s my suggestion because the price of oil has come down and also the federal government gets less money from Petronas.”
He reiterated that there should be some adjustment of federal allocations to Sarawak for development as the state’s area was very large compared to the other states.
“Federal allocations to all the states should be looked into. But I am not suggesting anything, I am just saying you should study….,” Dr Mahathir added.
Meanwhile, Second Minister of Planning and Environment Datuk Amar Awang Tengah Ali Hassan said Dr Mahathir agreed that the Federal Government should relook into the request from Sarawak for a hike of oil royalty from the current five per cent.
“I think he’s very supportive on what we have requested,” said Awang Tengah, who was representing the Chief Minister who is currently performing his Umrah.
Among those present at the event were State Secretary Tan Sri Datuk Amar Mohd Morshidi Abd Ghani, Assistant Minister of Public Utilities (Water Supplies) Datuk Sylvester Entrie Muran and State Planning Unit director Datu Ismawi Ismuni.