Who’s the real winner in Petronas vs Sarawak O&G settlement, asks Padungan rep

Wong King Wei - file pic

KUCHING, May 10: Padungan assemblyman Wong King Wei has questioned whether it was worth for Sarawak to “lose ownership” over its oil and gas for RM2 billion.

Urging Sarawakians to “stop clinking their champagne glasses” over the Petronas versus Sarawak government’s recent settlement outside the court, he asked who was the bigger winner at the end of the day.

“This is a settlement outside of court, which is good news to Sarawakians and hidden anxiety at the same time. The good news is that Petronas has finally acknowledged that Sarawak has the right to impose the state sales tax (SST), thus agreed to pay some RM2 billion in sales tax owed to Sarawak.

“The hidden anxiety is that Sarawak has acknowledged that Petronas has ownership over the oil and gas in the country. This indicates that Sarawak can no longer challenge Petronas over oil and gas ownership in the future. Hence, it brings me to ask, is it really worth it to let go of our ownership at RM2 billion?” he said in a statement.

According to the 2019 State Budget, Wong pointed out that Sarawak is expected to generate RM3.9 billion from the SST on petroleum products.

“It goes to show that the RM2 billion is about half of the expected revenue. Where is the remaining RM1.9 billion? If Petronas is not paying, where do we collect it from?”

“The ownership of Petronas over the oil and gas is acknowledged in this settlement case. This implies that Sarawak acknowledges the Petroleum Development Act 1974, and will not be able to challenge this law. This is another hidden anxiety,” he opined.

Wong added that the settlement includes the sales tax imposed on petroleum products after the fiscal year of 2019, and it is a mutual consensus reached between the Sarawak government and Petronas.

“But what exactly is the mutual consensus? This is not disclosed in the statement issued by the Sarawak Chief Minister Datuk Patinggi Abang Johari Tun Openg. The 2019 State Budget estimated to generate RM3.9 billion revenue from the sales tax but we received only RM2 billion.

“Now, the 2020 State Budget estimated to generate RM2.878 revenue from the sales tax, are we going to expect to collect a gravely discounted revenue?” he asked.

Wong urged the Sarawak government to explain further the matter.

On May 8, Petronas announced that it will pay Sarawak government RM2 billion in SST for 2019.

In a joint press statement issued by the Assistant Minister of Law, State-Federal Relations, Datuk Sharifah Hasidah Sayeed Aman Ghazali, and Petronas chairman Datuk Ahmad Nizam Salleh, both the Sarawak government and Petronas have reached an amicable settlement of five per cent SST on petroleum products in Sarawak and withdrew all legal proceedings.

It was also agreed that Petronas will continue to be recognised as the country’s O&G company, which has full control in regulating the whole development of the O&G industry in accordance with the Federal Constitution.

Both parties have also come to the consensus that Petronas together with the Sarawak government will continue to develop the O&G industry in Sarawak. — DayakDaily