Agreement with Petronas on SST bodes well for oil and gas sector in state

Chief Minister Datuk Patinggi Abang Johari delivering the announcements on the Sarawakku Sayang 3.0 Financial Aid during a press conference at Wisma Bapa Malaysia here today. Photo Credit: Sarawak Public Communications Unit (UKAS).

KUCHING, May 8: The Sarawak government has achieved a significant milestone following its agreement with Petronas on state sales tax (SST) on petroleum products pursuant to the Malaysia Agreement 1963.

“With the agreed solution, a more steady business and investment environment may come about to allow a further boost of the petroleum industry in Sarawak.

“The Sarawak government is a practical one and wants to convince all oil and gas industry players that it is always business-friendly.

“Thus, the Sarawak government is committed to cooperating with the federal government and Petronas to ensure that agreement may be reached in other issues by all parties in its next negotiation,” said Chief Minister Datuk Patinggi Abang Johari Tun Openg in a press statement today.

The statement is in response to the latest development where both the Sarawak government and Petronas had reached an agreement over the issue of 5 per cent SST on petroleum products.


The Sarawak government had imposed a 5 per cent SST on petroleum products since 2019. While other oil and gas companies had all agreed to pay their dues, Petronas had refused to make payment.

This had led to the Sarawak government serving a payment order to Petronas which in turn took the Sarawak government to court.

However, both sides have reached an amicable settlement today on the issue.

Petronas today announced that it would pay the Sarawak Government RM2 billion in State Sales Tax (SST) for 2019 where all legal proceedings between the two parties will be withdrawn. —DayakDaily