Royalties must be based on gross revenue, says alliance

KUALA LUMPUR: Gabungan Parti Sarawak (GPS) says royalty paid to oil-producing states should be based on gross revenue.

Its parliamentary chief whip Datuk Fadillah Yusof said the payments should also increase from 5% to 20% as pledged by Pakatan Harapan in its general election manifesto.

He wanted to know if Sarawak Pakatan chief Chong Chieng Jen changed his stand on the oil royalty issue after the general election.

“If he agrees with the government’s move to distribute oil royalty based on net profit, he is betraying the people of Sarawak.

“Sarawakians want the Federal Government to fulfill the manifesto pledge and give a 20% royalty based on gross revenue,” he said.

Presently, all oil producing states get a 5% royalty from gross revenue, while the Federal Government gets 5% as well.

Following Azmin’s announcement in the Dewan Rakyat on Wednesday that the government wanted to distribute oil royalties based on nett profit, Chong was reported to have said that what the minister stated was in line with Pakatan’s election promises.

Meanwhile, PAS’ Kuala Terengganu MP Ahmad Amzad Hashim said Terengganu should be paid the 5% oil royalty as practised between 1975 and 1999.

He said the payment was stopped for political reasons when PAS formed the state government in 1999.

A year after PAS took over Terengganu in 1999, the royalties were converted to wang ehsan (goodwill payments), then channelled via the Federal Development Department.

This time, the royalties are expected to go directly into state coffers.