Petronas to pay RM28b dividend to Putrajaya

KUALA LUMPUR, May 31 — Petronas will pay the government RM28 billion in dividends or slightly more than half of its total net profit from the 2011 financial year.

Petronas reported RM55.6 billion in net profit for the nine months ended 31 December 2011.

The national oil company is changing its financial year to end in December starting this year.

Petronas CEO Datuk Shamsul Azhar Abbas said that the state oil company will be paying the government a maximum of 30 per cent of its profit as dividends starting next year.

"The government is aware of the need for Petronas to have funding for growth and they respect that," he said at a press conference today.

The dividends will be payable in eight instalments between April and November 2012.

Dividends from Petronas have in recent years made up about half of all federal government revenues leading the World Bank to warn that the country is overdependent on oil to finance its operational expenditure.

Petronas reported a higher first quarter net profit of RM20.7 billion today but warned that the second quarter outlook was less rosy due to expected lower oil prices.

It noted that oil prices today are about US$106 per barrel as compared with about US$130 in the first quarter and the figure is expected to fall further to between US$80-90 later this year.

The Najib administration has pushed for more efficient tax collection as part of its fiscal reforms resulting in higher tax revenues this year.

It however put off the implementation of the broad based goods and services tax apparently to avoid a public backlash.

It was earlier reported that only about one million Malaysians pay income tax out of a population of about 28 million.