KUALA LUMPUR: Putrajaya will not pay oil royalties to any states in Peninsular Malaysia, including Kelantan, says the Finance Ministry.
However, Kelantan will continue receiving "wang ehsan" (goodwill payments) for the petroleum that was produced near its coast, said the ministry in a Parliamentary written reply dated Nov 24.
The Finance Ministry was responding to Ahmad Fadhli Shaari (PN-Pasir Mas), who asked the Finance Ministry if Putrajaya will be paying Kelantan any oil royalties.
The Finance Ministry said although petroleum was being produced close to Kelantan, it took place outside the state's waters.
The goodwill payments are to assist Kelantan to implement projects and programs that will benefit the people.
"No cash payments (will be made) by Petronas, specifically for the production of petroleum in any states in Peninsular Malaysia, including Kelantan.
"This was because the petroleum production site is operating outside of Kelantan's waters," he said.