Royals spearhead fight for oil royalties

Sean Augustin, fz.com

The sharing of oil royalties between the federal government and oil-producing states, an issue heavily championed by the opposition, is now evolving into a rallying cry for Barisan Nasional politicians to demand a bigger slice of revenue for the states.

One platform for this cause is Amanah Terengganu, a non-partisan NGO that will embark on a roadshow next year to increase awareness about the people’s right to development.

Amanah Terengganu chairman Datuk Raja Kamarul Bahrin Raja Ahmad believes that the issue could even determine the next state government after the general election.

The NGO is a branch of Angkatan Amanah Negara, headed by Umno stalwart Tengku Razaleigh Hamzah.

Other leaders in the national group include former MCA president Datuk Seri Ong Tee Keat and Datuk Seri Wilfred Bumburing, who is aligned to Pakatan Rakyat.

The issue of oil royalties is a thorny one for the federal government in Terengganu, Kelantan, Sabah and Sarawak, especially since oil revenue is the biggest contributor the national budget. While the East Malaysian states have been receiving 5% of oil royalties, Kelantan has been fighting for its share, and Terengganu has had a chequered history of payments after PAS took control of the state from 1999 to 2004.

Terengganu’s oil royalty was replaced with gratuity money or “wang ehsan”, which was paid at the discretion of the federal government.

Raja Bahrin feels that because the people of Terengganu are not well-informed about their stake in the issue, they may not press the government to recognise their rights, which in turn could see Terengganu lose out in the long run.

"About 90% of the state's budget comes from oil and gas. However, the state is supposed to receive 5% in royalties,” he told fz.com.

"Wang ehsan can be zero and there is no time frame or set percentages," he said.

Raja Bahrin stressed that the state cannot be developed on gratuity money alone. Terengganu, he said, should take Aceh as an example when it comes to the importance of oil royalties.

The province in Indonesia was granted autonomy in 2002 and was awarded a 70% share of royalties from the sale of natural resources, including oil and natural gas.

As a result, Raja Bahrin said, the province is booming.

"We are not asking for autonomy, just 5%. Sabah and Sarawak have their share, although they are now demanding 20%," he said.

In 2000, the then Prime Minister Tun Dr Mahathir Mohamad had ordered the national petroleum company, Petronas, to rescind oil royalty payment on the grounds the federal government had no confidence in PAS to manage the funds.

The PAS-led state government filed a suit against the federal government in 2001, insisting that the latter's decree was illegal as its share of the 5% was an agreement made between Petronas and the state government.

The case had been stuck in court and in 2009, the federal government reinstated oil royalties, although disagreements remained particularly around 'wang ehsan' or gratuity money.

In 2008, the federal government claimed that Terengganu had been paid RM7.364 billion from March 2004 to March 2007.

However, current Terengganu Menteri Besar Datuk Seri Ahmad Said told the state legislative assembly that it had received RM6.218 billion between 2000 and 2008, while on another occasion claimed that the state only received RM4.3 billion, out of the RM7.364 billion, had been received.

PAS has said that it only received RM432 million of  the ‘wang ehsan’ payment when it ruled the state from 1999 to 2004.

This year, the BN-led state government voluntarily dropped its 11-year-old suit against Petronas, without any settlement.

"The rakyat must know on what grounds the suit was withdrawn.