Update people on progress of oil and gas royalty, state government urged

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  • Saturday, 24 Nov 2012

THE state government has been asked to update the people on the progress of negotiations between the Chief Minister and the Prime Minister with regards to increase in the oil and gas royalty.

Krian assemblyman Ali Biju said any increase in the royalty percentage would contribute substantial additional revenue, which could be used to improve the well-being of the people.

He said according to a report from the state Planning Unit EPU 2009, Sarawak produced RM67.7bil of petroleum products in the year 2008 alone.

“Just imagine how much 20% royalty would add to our state budget.

“How long can we Sarawakians endure this unfair distribution of our state’s wealth?

“We, the wakil rakyat are trying our very best to serve our constituents. However, without sufficient revenue, we are facing monumental obstacles,” he said when debating the state Budget 2013 yesterday.

Ali said almost every wakil rakyat was still requesting for construction of basic amenities such as a proper road system, steady supply of electricity, clean drinking water and poverty eradication.

He urged the state government, together with all members of the august house, to stay united to negotiate with the Federal Government to increase oil and gas royalties for the benefit the people.

He said the state’s projected revenue for the year 2013 of RM4,150 million is lower than the actual revenue for 2012 of RM4,702 million.

“If the price of our hydrocarbon exports does not increase, we can expect lower Budgets in the future,” he said.

Ali said the state’s economy was increasingly dependent on petroleum revenue.

He said during most of the 1990’s, petroleum royalty comprised less than 10% of Sarawak’s total revenue annually.

He said by the 2008 Budget, the oil and gas contribution to the state’s overall revenue had increased to a massive 34%, that was RM1,326 million out of the total projected revenue of RM3,550 million.

“Hence, any shortfall in oil and gas prices will inevitably have an adverse impact upon the state’s revenue,” he said.

He stressed that high percentage of the state’s revenue for 2013 at 39.2% of the total revenue would be derived from the oil and gas sectors, compensation in lieu of oil and gas rights, as well as compensation in lieu of import and excise duties on petroleum products.

“At RM1,629 million, this figure reflects the importance of these sectors’ contribution towards the state’s economy.

“This is despite the fact that Sarawak receives only 5% of oil and gas royalties,” he said.

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