Dr M: Oil producing states to get 20% royalty

This article first appeared in The Edge Financial Daily, on July 20, 2018.
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KUALA LUMPUR: Prime Minister Tun Dr Mahathir Mohamad assured oil producing states yesterday that they would receive 20% of oil royalties as stated in Pakatan Harapan’s election manifesto.

“All [oil producing] states, everybody will get 20% of the profit from their area. If the area produces a small amount, they will get 20% of the profit from that area. We will pay whatever is due to them, we will pay,” he told reporters at the parliament lobby today.

Dr Mahathir reiterated that the government is committed to paying whatever amount is due to the respective states. “This is their money. It is their royalty, they can take it.”

Earlier in the Dewan Rakyat, Rantau Panjang member of parliament (MP) Zailah Mohd Yusoff asked Dr Mahathir whether the government will still fulfil its promise to pay 20% oil royalties to oil producing states in the East Coast of Peninsular Malaysia.

After Dr Mahathir assured Zailah that the federal government would pay 20% oil royalties, the MP for Kapit Datuk Alexander Nanta Linggi stood up to seek clarification if Sabah and Sarawak would be entitled to 20% as well.

Dr Mahathir then stressed that all oil producing states are entitled to oil royalties, as the Pakatan Harapan government has no intention of siphoning money from oil royalties to strengthen any particular political party.

According to news reports, Sabah and Sarawak have previously been given 5% oil royalties while Terengganu and Kelantan have been granted “compassionate funds.”   

In the Pakatan Harapan election manifesto, drafted before the 14th general election on May 9, the coalition said it would increase the royalty payment to Sabah and Sarawak, and other oil producing states, to 20% or of its value equivalent, so that the respective states can take over and fund more of their own development activities.