Dr Mahathir with Chief Minister Datuk Seri Shafie Apdal, cabinet ministers and leaders.
KOTA KINABALU: Increasing the oil royalty to be paid to Sabah means adding on to Petronas’ operating cost, said Prime Minister Tun Dr Mahathir Mohamad.
Dr Mahathir who was asked on how soon will the 20 per cent oil royalty pledge made by Pakatan Harapan be fulfilled said, “We do not want to kill Petronas. If you take 40 per cent of its operating cost and add that to the operation cost, Petronas will lose money.”
Speaking to the media after a breakfast meeting with the state cabinet and leaders here yesterday, Dr Mahathir pointed out that Petronas is a unique company in the world because it is the only national oil company that goes into exploration, development, production and petrochemical.
People all over the world are asking Petronas to do work in their countries, he said, adding, “so if you reduce Petronas to just collecting royalty, then we lose a lot of things.
“We need to maintain the strength of Petronas but at the same time we feel that there is a need to relook at the five per cent which is part of the operation cost which is very big.”
When asked if the federal government will at least give up their five per cent of the royalty, Dr Mahathir’s reply was that it also gives back money to the states.
In fact a lot of states owe money to the federal government which they have not paid, he pointed out, adding, “these are non-performing loans (which) means we can bankrupt you if you don’t pay.
“But the states have money, they are even offering to lend money to the federal government so I think we should learn to live together to be fair to each other,” he said.
Dr Mahathir also said that there is a need to identify assets of Sabah which can be exploited as it has much potential.