Oil royalty: Vital to define term, explain calculation method clearly, says MP

Larry Sng

KUCHING, July 25: Putrajaya’s pledge to discuss the mechanism for royalty payment with oil-producing states is in line with the open and inclusive policy under Pakatan Harapan’s reformation agenda.

Julau MP Larry Sng said the definition and calculation used by the federal government with regards to oil royalty must be made clear with the oil-producing states, including Sabah and Sarawak.

He acknowledged the recent announcement by Prime Minister Tun Dr Mahathir Mohamad that oil-producing states would receive 20 per cent of the profits from their resources had caused anxiety and raised more questions from the public.

“I believe this royalty issue needs to be explained to the public, especially on the definition and calculation methods used by the present government. Is the definition used by the previous and current government still the same?” Sng said in a statement today.

The Parti Keadilan Rakyat (PKR) lawmaker reminded the federal government that many Sarawakians had supported the government’s reform agenda and chose to support the new leadership as seen in GE14, where the previous ruling Barisan Nasional coalition lost 12 out of 31 parliamentary seats in the state.


“Promises under ‘Buku Harapan’ must be fulfilled, including the oil royalty. I urge the federal government to make their decision based on ‘Buku Harapan’ to return Sarawakians their rights, which was mainly ignored by the previous government,” Sng said.

Economic Affairs Minister Datuk Seri Mohamed Azmin Ali, in replying to a question by Tuaran MP Datuk Seri Madius Tangau in Parliament, said Pakatan Harapan’s manifesto promise that all oil-producing states would receive 20 per cent net profit from their respective resources would take some time for the federal government to study and implement.

This is because there is a need to amend several laws, mainly the Petroleum Development Act 1974, to allow for the royalty to be calculated based on net profit and not gross value (being the case at the moment), he explained.

Azmin said a special Cabinet committee had been formed, comprising experts from all oil-producing states, to study and draw up recommendations agreeable to all parties involved within six months. It will then be presented to the cabinet. — DayakDaily