SARAWAK imposing the 5% sales tax on petroleum products mined and produced in the state, is to rights activist Lina Soo “a positive and encouraging move”.

Reacting to Chief Minister Abang Johari Openg’s announcement in the state’s budget today, Soo said it was “better late than never”.

“I hope the state will not waver in its pursuit to strengthen ownership control on oil and gas by enforcing the regulatory powers provided under the (state’s) Oil Mining Ordinance (OMO),” Soo said, referring to the law on the rights over oil and gas resources in Sarawak.

Petronas is disputing the OMO and said the Petroleum Development Act 1974 (PDA), passed by Parliament which gave the national oil company monopoly over all oil and gas resources in the country, has precedence.

In May, Petronas filed legal papers in the Federal Court seeking a declaration that it is the exclusive owner of the petroleum resources in the country, including in Sarawak, but in June, the court turned down Petronas’ application for leave to proceed with its bid to control oil resources and activities in Sarawak.

Abang Johari, in invoking the state’s right under Schedule 10, Part V(7) of the federal constitution which allowed the state to impose state sales tax, said the new sales tax is estimated to generate a revenue of RM10.39 billion next year.

“Time is of the essence here and we cannot afford to wait, beg and depend on the Malayans to decide our destiny as time and again the Malayans have proven they’ve not been sincere nor committed to the intents and terms of the Malaysia Agreement 1963 (MA63),” Soo said.

She said a fiscal expansionary budget is the correct approach to provide basic amenities like water, electricity and roads, instead of giving tangki biru, in reference to the blue water tanks the ousted Barisan Nasional government used to distribute to rural villages and longhouses that do not enjoy piped water.

Deputy Chief Minister Douglas Uggah, in his reaction, has described the state budget as one that “will bring great hope and a brighter future for especially the rural folk in more remote areas.”

Uggah, who is also Minister of Agriculture Modernisation, Native Land and Regional Development, said this was evident from the large allocation of RM9.07 billion for the development of rural areas.

“Our rural people can expect more roads, bridges, water and power supply projects besides other amenities and utilities.”

The Sarawak chief minister, who was disappointed with the national Budget 2019 tabled in parliament last Friday, said the destiny of Sarawak could only be determined by Sarawakians.

Abang Johari said, the oil and gas sector is expected to expand at a “modest rate” of 2.6% this year supported by an increase in output production.

“Demand for crude oil remains strong and oil price has gone up to an average of US$75 (RM313) per barrel following the agreement to reduce crude oil production output by the Organisation of the Petroleum Exporting Countries (OPEC).

“With this positive trend for crude oil prices, the mining sector is anticipated to remain a significant contributor to the state economy for 2019,” he said. – November 5, 2018.