Shafie: Paying 20% oil royalty won’t bankrupt federal govt

KOTA KINABALU: The federal government will not go bankrupt even if it pays out the 20% oil royalty to three oil producing states, said Chief Minister Datuk Seri Mohd Shafie Apdal.

The federal government was already earning three ways from the oil industry that includes 5% oil royalty, dividends from Petronas and also taxes, he said as he marked his 100 days in office yesterday.

In 2013, the federal government received RM32bil in dividends from Petronas, he said.

Shafie said both Pakatan Harapan and Parti Warisan Sabah had made an electoral promise to increase the current oil royalty from 5% to 20% based on gross production.

“We are pursuing it. I will be meeting with the Prime Minister and Economic Minister to further discuss this matter,” he said, adding that he had also met with Petronas president Datuk Ahmad Nizam Salleh here last weekend.

However, he declined to disclose discussions with Petronas.

Shafie added that as Sabah was a big state, it needed funds from its natural resources for development, which was lagging behind in many aspects.

The state is also pursuing the 40% return of revenue earned by the federal government from Sabah as provided under the federal Constitution.

He said the state was only getting about RM23mil in returns annually over the years.

“It is not an easy task, we need to discuss as these issues have been around for the last 50 years,” he said.

On the ongoing graft investigations on the State Forestry Department, he claimed the state had lost billions of ringgit to corruption.

He did not rule out the possibility of bringing in an outsider as the Chief Conservator of Forests to replace Datuk Sam Mannan who retires on Oct 31.