Reports by MUGUNTAN VANAR, STEPHANIE LEE , FATIMAH ZAINAL and SHARON LING
KOTA KINABALU: The federal government is ready to revise the existing 5% royalty paid to oil-producing states, but the move must be done without “killing” Petronas, said the Prime Minister.
“We don’t want to kill Petronas. If we take 40% for oil royalty from its operating cost, Petronas will lose money,” added Tun Dr Mahathir Mohamad.
Malaysia stands to lose out if Petronas is reduced into an instrument merely to collect oil royalty, said Dr Mahathir.
“Petronas is a unique company as it’s the only national oil and gas company that goes into exploration, development and production in petrochemical.
“If you reduce Petronas to just collecting oil royalty, then we lose a lot of things.
“We need to maintain the strength of Petronas. At the same time, we feel that there is a need to relook some things.
“The 5% is part of operation cost and that’s very big,” Dr Mahathir told reporters before departing for Kuala Lumpur yesterday.
Pakatan Harapan, in its GE14 manifesto, had pledged to raise oil royalty for all oil-producing states to 20% from 5%.
On a question whether the federal government would be giving up its 5% royalty, Dr Mahathir said the federal government has been giving back to the states in Malaysia.
He said that in fact, many states still owed money to the federal government.
“There are non-performing loans – that means we can bankrupt you if you don’t pay.
“But the states have money; they are even offering to lend money to the federal government,” he added.
Dr Mahathir, who was in town for the Malaysia Day celebrations on Sunday, also said that there is a need for fairness.
“I think we should learn to live together and be fair to each other,” he said.
We're sorry, this article is unavailable at the moment. If you wish to read this article, kindly contact our Customer Service team at 1-300-88-7827. Thank you for your patience - we're bringing you a new and improved experience soon!