Oil royalty or federal grant? Terengganu wants to know

 

Petronas does not pay royalty to Kelantan and Terengganu because crude oil is extracted beyond the three nautical mile limit, the Dewan Rakyat was told. (AFP pic)

SETIU: The Terengganu government hopes that payment of a special federal government grant will be continued by the Anwar Ibrahim government.

The state government will seek an explanation from the finance ministry whether the previous grants to Terengganu were payments for petroleum royalty.

“The term royalty money was mentioned by the finance minister and the law minister in 2021, but the payment received never mentioned the term royalty, only DKKP (special federal government grant),” menteri besar Ahmad Samsuri Mokhtar told reporters.

Yesterday, law minister Azalina Othman Said told the Dewan Rakyat that Kelantan and Terengganu do not qualify for a 5% royalty on petroleum because Petronas extracts crude oil beyond the three nautical mile limit.

Azalina said the Territorial Sea Act stipulates that states can only claim rights up to three nautical miles.

She had been asked by former prime minister Muhyiddin Yassin (PN-Pagoh) whether the government would channel oil revenue directly to the states similar to what was done by his government. - FMT