Paulus Palu Gumbang
MIRI: Sarawak Backbenchers Club (SBC) chairman Paulus Palu Gumbang said Petronas should give Sarawak an equity stake equivalent to 20 per cent of the petroleum royalty instead of just five per cent royalty currently.
This, he believes, would ensure that Petronas remains a strong company while Sarawak gets her fair share of the deal in natural resources extracted from the state, pointing out that the PH coalition had pledged the 20 per cent royalty in its 2018 Election Manifesto.
He said this in response to the recent statement by Prime Minister Tun Dr Mahathir Mohamad that it would not be feasible to give the 20 per cent royalty as this could negatively affect Petronas as an international oil and gas company.
Dr Mahathir had previously proposed for 20 per cent profit instead of royalty but this was shot down by some politicians in East Malaysia who felt it short-changed the two states as 20 per cent profit will be less than 20 per cent royalty.
Royalty payment is based on the value of oil and gas extracted from the state while a share of the profit is based on the balance of that value after subtracting all the expenses incurred.
In 2014 the Sarawak State Legislative Assembly had unanimously voted in favour of a resolution to request the federal government for an increase in the oil royalty from five per cent to 20 per cent. It went on to amend the Oil Mining Ordinance 1958 and the state government imposed a five per cent sales tax for petroleum exports from the state .