Petronas to pay RM20bil govt dividend in 2026, lowest in nine years

KUALA LUMPUR: The Malaysian government is expecting a dividend payout of RM20bil from state owned energy firm Petroliam Nasional Bhd (Petronas) next year, the lowest in nine years, according to a government report on Friday.

Petronas paid RM32bil in dividends to the government last year, with the lowest payout in the last 10 years, amounting to RM16bil in both 2016 and 2017.

The drop underscored Malaysia's need to reduce its reliance on Petronas, a significant contributor to the government's coffers but vulnerable to volatile oil prices.

Petronas in August reported lower profits and revenues for the first half of the year, in line with falling benchmark prices.

Malaysia's non-tax revenue is expected to decline by 9.9% to RM72.7bil, due to the lower dividend payments from Petronas, the government said in a fiscal outlook report released alongside its 2026 budget.

Petroleum-related revenue will contract to RM43bil in 2026, while non-petroleum revenue will rise by 8.1% to RM300.1bil. The government forecast Brent crude oil prices to stand at an average of between US$60 and US$65 per barrel next year, according to its economic outlook report.

The natural gas subsector is also projected to decline due to lower production in Peninsular Malaysia and Sabah as well as weakening demand from major importing countries like Japan, China and South Korea, it said.

"Overall, natural gas production is expected to be slower, despite the scheduled commencement of several new projects," the report said.

The crude oil and condensate subsector is also forecast to decline next year, weighed down by lower output in Sabah. - Reuters