Monday, November 18, 2013

Sarawak deserves more oil royalties to boost development

Venu Puthankattil
KUCHING: Sarawak should get more oil royalties from the federal government as the added revenue would serve to provide much-needed funds to boost development in the state.

Sarawak PKRchairman Baru Bian told theantdaily that in terms of development and advancement, Sabah and Sarawak were “far behind” when compared to West Malaysia.

“The intention of Sabah and Sarawak in forming Malaysia 50 years ago was to ensure that our development would be on par with West Malaysia.

“Sad to say, we are almost at the same spot after 50 years. Otherwise, perhaps we probably would be much further [developed] than when we formed Malaysia,” Baru, the Ba’ Kelalan assemblyman, said.

He added that the justification for increasing the royalties for petroleum for Sabah, Sarawak and all the oil-producing states in accordance with the Pakatan Rakyat manifesto was timely.

One of Pakatan’s major campaign points in the 13th general election was that it would increase oil royalty from the current five to 20 per cent if it won the people’s mandate to form the federal government.

Baru pointed out that the added revenue from the boosted oil royalties could be utilised for infrastructure and public utilities in Sarawak that need massive funds to be implemented successfully.

“I think it is justifiable for the state government to demand an increase in percentage. I think it should ask for at least 10 or 15 per cent.

“I looked at last year’s figures for Sarawak. Generally, five per cent is about RM1.5 billion annual royalty from the federal government. If the rate is 20 per cent, the royalty would be RM6 billion.
“In fact, the budget for the whole state last year was about RM4 billion. A sum of RM1.5 billion was from petroleum and the balance from other sources.

“With 20 per cent royalty, we could have RM6 billion to RM8 billion, with an excess of RM3 billion to RM4 billion.”

“I think it is fair to say that there at least should be a minimum of 10 to 15 per cent royalty,” he said.

State Housing Minister Datuk Amar Abang Johari Tun Openg said on Jan 20 this year that the state government had formulated a plan involving more benefits to Sarawak, but added this could not be revealed at the time pending further discussions with the federal government.

Abang Johari, who is also State Tourism Minister, spoke of “a new approach which we believe the federal government leaders will also recognise because it’s going to be a win-win situation for both sides”.

Prime Minister Datuk Seri Najib Razak had on April 2 stated that 20 per cent royalty along with cheaper oil and gas prices would take a toll on Petronas and consequently on the country’s advancement as well.

He added that the proposed royalty rate in Pakatan’s manifesto would hamper the national oil and gas corporation’s ability to invest in the lucrative oil and gas sector.

Petronas is in the midst of an unprecedented RM300 billion in capital expenditure for the five-year period 2011-2015 in its mission to intensify the quest for hydrocarbons.

~ The Ant Daily

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