20% oil royalty, another unfulfilled promise by Parti Warisan
KOTA KINABALU, 16 September 2018: Ever since the May 9 general elections, Parti Warisan Sabah has made many U-turns on their promises, the Kaiduan Dam, Sabah ICs and the 20 percent oil royalty, just to name a few.
While launching the party’s manifesto on April 27 Parti Warisan Sabah president Datuk Shafie Apdal had said that Warisan would demand the oil royalty due to Sabah increased from the current 5% to 20% if it won the state in the elections. Warisan had described the present royalty rate as an injustice suffered by both Sabah and Sarawak, saying that the Borneon states had been deprived of what was rightfully theirs under the Malaysia Agreement 1963.
What has become of that election promise on the 20 percent oil royalty increase? My question is in view of what Federal Minister for Economic Affairs Datuk Azmin Ali revealed yesterday that, after a two-hour discussion with Datuk Shafie Apdal, that “Petronas might have to close down because Petronas cannot afford to pay 20% oil royalty based on net profits.”
Instead, Sabahans are now made to wait for a committee to submit its report in six months to a federal cabinet committee which in turn will submit it to the federal cabinet. We will also have to wait to hear what Kelantan, Trengganu and Sarawak have to say. We will now see how we must comply with the Petroleum Development Act 1974, which started the exploitation of our oil resources in the first place.
Perhaps it is easier said than done. That is why Prime Minister Tun Dr. Mahathir Mohamad agreed on a 20% profit because 20% straight up royalty is not economically feasible.
Warisan seems to be playing to the public gallery because saying to give and being able to give are two different things. Sabahans are aware the growth in oil and gas is vital to our social and economic development. The issue of oil royalty has for a long time been a sore point for Sabah. However simply promising a 20 percent increase in oil royalty is not good enough. That is just lip service to create a momentary feel good factor.
I would like to know how and when will Warisan fulfill its promise on the 20 percent oil royalty increase for Sabah and its people. There is no need for a committee of educated ministers to count 20% from 5%. A phone calculator will tell you that 20% is four times of 5%. The mechanism and formula to count the 5% or 20% pursuant to the Petroleum Development Act 1974 are already in place and have been in use for 40 years. 20% royalty means four times whatever that Petronas has been paying Sabah based on production volumes and market prices. Even a kindergarten kid can count that.