Wednesday, October 23

Dr M: 20pct oil royalty for Sarawak, Sabah ‘really not workable’

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Dr Mahathir Mohamad

KUCHING: Tun Dr Mahathir Mohamad has all but snuffed out the hope of Sarawak and Sabah to have their oil royalty raised to 20 per cent under the Pakatan Harapan government, although this was promised in its election manifesto.

The prime minister said in a Bernama report from New York today that the government now realised that giving 20 per cent to the two states would mean that Petronas would no longer become the international oil company that it was.

“So we have to appeal to the Sabah and Sarawak governments that it is really not workable,” he said at a dialogue session with fund managers at the JP Morgan headquarters here on Thursday.

“They don’t want to kill Petronas but at the same time they want more money, so we’re trying to work out how we can give them more money without undermining Petronas’ own strength,” Dr Mahathir said.

On Sept 13, Finance Minister Lim Guan Eng had hinted that the long standing wish of the two states to raise the oil royalty from five per cent to 20 per cent might not materialise.

He said legacy issues from the previous government were preventing the implementation of promises under the PH manifesto, especially the oil royalty for Sabah and Sarawak.

“The previous government caused an enormous amount of funds to either be wasted or put Malaysia in trouble. You are looking at funds of RM150 billion, which is not a small sum. This has definitely posed a challenge for us in implementing our promises.

“At the same time, I am sure we will announce certain measures to show our prioritisation of Sabah and Sarawak has not diminished,” he had said.

PH had toppled the Barisan Nasional government in the general election in May last year on the back of the manifesto, which among others pledged to raise the royalty of oil producing states to 20 per cent or of its equivalent value.

Meanwhile, Dr Mahathir revealed today that the government was mulling the possibility of listing one of Petronas’ subsidiary to make Bursa Malaysia more attractive.

He said Petronas Carigali was one of the candidates, adding that there were also other possibilities.

“At the moment we feel that selling Petronas shares is not going to be good for the government because the government needs Petronas to support it,” he said, adding this may be considered at a later stage.

“But what we agreed is to look at the subsidiaries. We may sell off the shares of the subsidiaries because that will not affect Petronas that much. One of them is (Petronas) Carigali but there are also a few others,” he said.

The prime minister is in New York for the 74th Session of the United Nations General Assembly.

On whether Khazanah Nasional Berhad would continue to be encouraged to sell down its shares in government-linked companies, he said: “There would be some control over certain industries but as to government involvement in business, we’ve always believed that the government should not be in business. We’re not good at it.”

Dr Mahathir said it would be better for business to be done by business people.

“That is still our policy and we are selling off many of the companies which are owned by Khazanah,” he said, adding that those giving good returns would not be easily sold off.

On the 2020 Budget, which will be tabled in Parliament on Oct 11, Dr Mahathir said it would reflect the government’s goals under the Shared Prosperity Vision.

“We want to have shared prosperity between town and country, between state and state, between the different races and between the rich and poor,” he said.

He said the disparities must be reduced and this must be reflected in the next budget.

“That means of course that we will give less to the more prosperous and more to the less prosperous,” he said.