Federal government is not intent on giving 20% oil-royalty

TTF: Dato’ Seri Azmin Ali claimed today that the federal government is committed to fulfilling terms of the Malaysia Agreement 1963 when addressing the question of royalty to oil producing states.

However, he added that for this to happen, the state governments involved (Sabah, Sarawak, Kelantan and Terrengganu) would have to agree with recommendations before the federal government could grant these states the promised 20% royalty.

But the recommendations have yet to be spelt out clearly.

It should be noted, that if indeed the federal government is serious in fulfilling terms of the Malaysia Agreement 1963, all one would need to do is to refer to those terms and draft necessary laws without the need to compel any one party to agree with additional recommendations.

The only challenge the federal government would face is if there have been additional clauses introduced or revisions made to the Constitution of Malaysia in ways that contravene terms of the Malaysia Agreement 1963.

TTF is made to understand that there are none insofar as the question of oil royalty goes.

In follows, that neither is the federal government committed to fulfilling terms of the Malaysia Agreement 1963 nor is it committed to giving 20% royalty to oil-producing states.

On the 26th of July 2018, I wrote:

Dato’ Seri Azmin Ali may just have shot himself in the foot.

Yesterday, the Minister of Economic Affairs stressed the need for the Petroleum Development Act (PDA) 1974 to be amended before Pakatan could do good on its promise to offer 20% royalty to oil-producing states.

According to him, the amendment was necessary as hinging royalty calculations on gross production would be detrimental to Petronas and the country.

“The act carries out calculation based on gross profit,” he said, adding that an amendment would allow for calculations to be based on net profit instead.

But his statement reeks of a massive con job on the part of government to mislead the people.

Prior to GE14, Pakatan Harapan promised to offer the royalty without ever specifying the need to amend the Petroleum Development Act (PDA) 1974.

What this means, is that the coalition had no qualms calculating royalties based on gross production as opposed to the net profit method Azmin is now proposing.

But just for the sake of discussion, let’s assume that Azmin just realised the grave repercussions oil royalty payments would have on Petronas should calculations be based on gross production.

Under the circumstances, not only must the Petroleum Development Act (PDA) 1974 be amended, he must consult with all oil-producing states regarding his proposed method of calculation for royalty payments.

Parliament is already in session.

By now, Azmin should already have proposed a Bill to parliament if indeed his intent is to amend the Act.

But he has yet to even hold discussions with Sabah, Sarawak, Terengganu and Kelantan despite it being more than two months since he came into power.

Here itself, you can see that Pakatan has absolutely no interest in honouring its royalty pledge and may deliberately have demanded that calculations be based on net profit.

Azmin knows as well as I do that the oil-producing states will never agree to calculations based on net profit and will probably drag discussions for an indefinite period of time.

Under the circumstance, Pakatan will get away with not paying these states the promised quantum by accusing them of being uncooperative. 

Did you actually think that Dr Mahathir Mohamad would allow PAS run states to receive 20% oil royalty?

KOTA KINABALU: The federal government is committed and will fulfil terms of the Malaysia Agreement 1963 and give back 20% royalty to oil-producing states, says Datuk Seri Azmin Ali.

The Economic Affairs Minister said a special cabinet committee has been set up to oversee this and they have six months to come up with recommendations to implement the 20% royalty.

“But of course, the state governments involved (Sabah, Sarawak, Kelantan and Terrengganu) need to agree (with the recommendations) before we can proceed,” he said after meeting with PKR leaders in Sabah on Saturday (Sept 15).

He said the federal government wants to increase the existing 5% royalty received by these states to 20%.

“We still have some matters to be ironed out but I am confident that we will get what is ours soon,” he said.

Shafie said that the state government would continue to push for what is owed to the state.

He also added that the Sabah wanted some devolution of federal-level power such as the implementation of certain projects, which he said the state itself could handle.

He said Sabah has the resources and any issues could be overcome.

“Our target group is the same, which is the people of Sabah.

Shafie said all we needed was funding from the government.

“We want to help the people and this is the ultimate goal,” he said.

Source: The Star Online

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