Set up wealth fund to manage Sarawak’s petroleum resources, says state rep

Petronas and its subsidiaries paid RM2.95 billion in SST on petroleum products to the Sarawak government yesterday. (Reuters pic)

KUCHING: Sarawak should set up a wealth fund under the watch of the state legislative assembly to manage petroleum resources in the state, said an opposition leader.

Batu Lintang assemblyman See Chee How, in a statement today, said this was to ensure that all Sarawakians have a fair share in ownership and obtain equitable benefits from the resources.

He said Petronas obtained sales revenue of RM59 billion from Sarawak last year. Therefore, the 5% state sales tax (SST) imposed on petroleum products paid to the state amounted to RM2.95 billion.

He said together with the other petroleum conglomerates, Sarawak’s sales revenue from petroleum and petroleum products would have been more than RM61 billion last year.

“For the first time, it has come to public knowledge that the petroleum proceeds that the national oil company and its subsidiaries had acquired from Sarawak is six times our annual state budget,” he said.

See Chee How.

“Although there are enormous production costs involved, contributions to the federal government in corporate tax of 38% and petroleum income tax in excess of 20%, on top of the 5% royalty payment to the state, the federal government remains the biggest beneficiary and recipient of Sarawak’s petroleum proceeds.

“Sarawak is grievously prejudiced by such unfair and inequitable distribution of our petroleum proceeds considering the fact that the petroleum resources are depleting.”

See said Sarawak must be firm and ready to seek legal redress on the infinite application and exercise of the provisions and authorities under the Petroleum Development Act 1974 and Territorial Sea Act 2012 to end any “illegality, unconstitutionality and injustice”.

Yesterday, Chief Minister Abang Johari Openg said the state government would focus on discussions with the federal government to reach a “commercial settlement” on matters relating to oil and gas found and produced in Sarawak.

“Therefore, I hope the Sarawak government will go back to the state legislative assembly before it reaches any agreement with the federal government and Petronas to ensure it is transparent, authorised, legitimate and proper,” he said.

He said the state government and Petronas must devise and implement a five-year localisation plan to realise full Sarawakian administration, management and operation of the national oil company operations in Sarawak.

This should include full autonomy on the award and management of contracts for existing and future assets in Sarawak.

He also said Sarawak should be given 50% asset ownership and 20% of net profit from all operations from existing and future assets in the state.