Oil royalties for Terengganu
National Finance Council agrees to payment although state is not under Pakatan
National Finance Council agrees to make direct payment to state instead of via federal development department.
PUTRAJAYA: After an 18-year wait, Terengganu will now be getting its share of oil royalties that will go directly to the state’s coffers, instead of via federal development department.
This was decided at the first National Finance Council meeting held by the Pakatan Harapan government.
Terengganu Mentri Besar Dr Ahmad Samsuri Mokhtar said this was certainly good news for the state.
“We have been told that the oil royalties will be given to the state, regardless of the political party governing the state, even if it is not the same as the central government,” he told reporters here yesterday.
“We will be informed of the details later, including the quantum and when this new policy will take effect,” said Dr Ahmad Samsuri.
The meeting was chaired by Prime Minister Tun Dr Mahathir Mohamad and attended by Deputy Prime Minister Datuk Seri Dr Wan Azizah Wan Ismail and Finance Minister Lim Guan Eng as well as the Mentris Besar and Chief Ministers.
Besides Terengganu which is administered by PAS, the other petroleum-producing states are Kelantan (also under PAS), Sarawak (Barisan Nasional) and Sabah (Parti Warisan Sabah).
A year after PAS took over Terengganu in 1999, the royalties were converted to “wang ehsan” (goodwill payment), which was then channelled via a federal development department.
Although Barisan recaptured the state in 2004, this arrangement has remained until now.
Kelantan had been demanding for royalties for years but was only given “wang ehsan” since 2010.
However, oil royalties are paid to Sabah and Sarawak at 5% per annum.
Pakatan had pledged to give oil and gas-producing states a “reasonable sum” as royalties in its manifesto, adding for Sabah and Sarawak, this would be raised to 20%.
Asked if Terengganu would press for a higher percentage of royalties, Dr Ahmad Samsuri said this would be discussed later.
Dr Wan Azizah said the Government would be channelling funds to opposition states.
“But it has to be given to the people, irrespective of their political alliances,” she said.
Dr Mahathir, she said, also raised the issue of equitability and pointed out that less wealthy states could be given more allocation compared to those with more earnings and revenues.
In a statement, the Finance Ministry said this year’s federal allocation was RM8.16bil and would be issued to the states as planned.