Sarawak insists on 20% oil royalty based on production
KUCHING: The payment of 20 percent oil royalty promised by the Pakatan Harapan (PH) federal government to Sarawak should be made based on production or income instead of profits.
Minister of Tourism, Arts, Culture, Youth and Sports Datuk Abdul Karim Rahman Hamzah said there is a huge difference between 20 percent of production and profits.
He said if payments are based on profit, Sarawak is likely to receive lower sum than the current five percent in royalty after taking into account the production costs.
“What Prime Minister Tun Dr Mahathir Mohamad said is not clear where he at one time mentioned 20 percent oil royalty and on another occasion he said 20 percent of the profits.
“There is a big difference in this matter and if royalties are paid based on profits, world oil prices and high production costs, the 20 percent profit can be lower than the current five percent royalty,” he said.
He said this when met by reporters after a press conference on the 2018 Stage Malay Dance and Malay Song Competition at Rumah Sarawak here yesterday.
Abdul Karim said Sarawak’s stand was clear, that was to claim 20 percent royalty based on production or income.
This royalty payment is important for Sarawak to carry out the development in the state.
“This is our resources, which have been given to other states and although Sarawak is not under PH it is undesirable for PH government to treat Sarawak that way,” he said.
Meanwhile, Tun Mahathir in the Parliamentary sitting on Thursday said the PH Government would fulfill its promise to give 20 percent oil royalty to the oil-producing states including Sarawak.
However, he seemed to clarify his earlier statement later by saying that the 20 per cent payment will be based on profit instead of production.