PAKATAN Harapan’s 20% oil royalty election pledge did not influence voters in oil-producing states to vote for the pact, said Mohamed Azmin Ali.

The economic affairs minister said the pledge did not sway voters, after the Barisan Nasional opposition questioned whether people were deceived into supporting PH on the promise of higher royalty payments to oil-producing states.

The government said recently the 20% would come from net profit and not the gross value of the oil produced and that the matter has to be studied further.

“I think this is not relevant. The people are confident that PH will make good of its pledges,” Azmin said.

“Whether the royalty will be from the net profit or the gross value of the oil production, it will be discussed with the states that produce oil.

“This is also provided in the Petroleum Development Act 1974 (PDA). Is that a violation of the pledge? No. PH’s offer (20% royalty payment) has to be referred to the states.”

Azmin was replying to Mustapa Mohamed (BN-Jeli), who had said the former administration studied the 20% royalty payment years ago and found it unviable, as it would adversely affect Petronas and other companies.

Petronas (Petroliam Nasional Berhad) is wholly owned by the Malaysian government. It is vested with the country’s oil and gas resources and entrusted to develop and add value to these resources. 

The oil royalty issue was discussed during question time today when Azmin answered Wilfred Madius Tangau (Upko-Tuaran), who asked when the PH government would implement the 20% royalty payment to oil-producing states.

Similar questions were also directed to the government by several other MPs, including those representing Bachok, Bandar Kuching, Kuala Krai, Keningau and Pengkalan Chepa.

Azmin said when PH included the oil royalty promise among its GE14 pledges in the Buku Harapan (Book of Hope), the intention was to share the country’s wealth more equally with oil-producing states to help them develop.

A special cabinet committee has been set up to examine the Malaysia Agreement (MA63) to safeguard Sabah and Sarawak’s rights, including their oil and gas revenues.

The government, he said, has studied the viability of the 20% royalty payment from net oil production profits.

“This proposal cannot be implemented immediately because it contradicts the law, like the PDA.

“Under the act, calculations are based on gross profit, and not net profit. So, if we want to increase the royalty payment to 20%, it will take time to amend the law.” – July 25, 2018.