Idris: Petronas to pay 5% tax first before Sarawak considers other options

Datuk Idris Buang

By Lian Cheng

KUCHING, Dec 11: Parti Pesaka Bumiputera Bersatu (PBB) information chief Datuk Idris Buang says the new proposal of giving stakes to oil and gas (O&G) states is worth considering, but Petronas must first honour the 5 per cent State Sales Tax (SST) on O&G products which other companies have paid up.

Idris was commenting on the new proposal suggested by Prime Minister Tun Dr Mahathir Mohamad on the new solution of selling stakes in Petronas to oil-and-gas producing states to fulfill Pakatan Harapan’s 20 per cent oil royalty promise.

“To me, it is worth considering but the issue of Royalty and State Sales Tax must be settled first as separate issues,” Idris told DayakDaily.

Idris who is also Muara Tuang assemblyman, insisted that for Sarawak to agree to the new proposal, representatives from Sarawak must be appointed as board members where they would have a reasonable say in decision-making within Petronas or its subsidiaries.


Meanwhile, Petronas CEO Tan Sri Wan Zulkiflee Wan Ariffin said that increasing oil royalty to O&G producing states to 20 per cent was not possible.

Wan Zulkiflee was reported to have said that Petronas only made a profit margin of 3.7 per cent from oil production locally, after accounting for matters such as production costs, oil royalty and tax.

To Idris, “unable to pay Sarawak” was only an excuse and Petronas should know that as true sovereign owners of natural resources, Sarawak had every legal and moral right to ask for what reasonably belonged to Sarawak.

“Ironically, Petronas easily gave the federal govt RM82 billion with just a stroke of a pen last year, a sum which is far more than all the total ‘cash payments’ that Sarawak received from Petronas for the last 40 plus years,” Idris pointed out.

He said Petronas had extracted Sarawak’s resources for more than 40 years and in return, gave Sarawak merely “peanuts” compared to what they had benefited.

“Sarawak’s contribution has assisted in propelling Petronas to develop into an O&G giant universally.

“Knowing very well now that Sarawak needs to develop itself further and has lots of catching-up to do for the state and its people, Petronas and the federal government should now accede to our needs. After all what we are asking are within the term of reasonableness.

“It should be part of their ‘good governance requirement’ to ensure that the rights of the permanent sovereign owner of the resources are fulfilled and not violated or ignored.”

He said this should be the way, in consonant with the principle established in the United Nations via its General Assembly resolution 1803 (XVII) of 14 December 1962 which upholds permanent sovereignty over natural resources.

“That resolution is being upheld and practised universally so as to check on any form of exploitation of a state of its natural resources.

“Petronas should know that. They should take this principle into account and give due respect to the terms of MA63 (the Malaysia Agreement 1963) and the IGC (the Intergovernmental) Report, to understand our stand from Sarawak perspective,” said Idris.

He added that, under no circumstances should Sarawak’s special rights under MA63 and under the Federal Constitution be compromised. That included its rights to enforce its own State Laws over its territory such as Sarawak Land Code Ordinance, the Oil Mining Ordinance, the Sales Tax Ordinance, to name a few.—DayakDaily