Prime Minister Najib Abdul Razak is well on the way to fulfilling his father’s promise to give oil royalty to Kelantan, Minister in the Prime Minister’s Department Nazri Abdul Aziz said today.
He added that the committee appointed by the government to review this issue with regard to the east coast states of Peninsular Malaysia, showed the premier’s sincerity.
“The committee will hold discussions and further announcements will be made after Najib meets the attorney-general. Probably tomorrow the matter will be discussed further,” he said.
Nazri added that there are certainly pros and cons to the issue and the federal government hoped the committee would help put the issue at rest.
“Najib is not fulfilling it because of PAS demands. He is willing to consider fulfilling what his late father, second prime minister’s Abdul Razak Hussein, had said in the Dewan Rakyat in the 1970’s, that payments will be made for oil found off-shore.
“Based on this, in my opinion, Najib feels there is a need for finality to this matter.”
The committee as announced by the government is chaired by former Chief Justice Abdul Hamid Mohamad.
Members of the committee would comprise legal experts from within and outside the country, and representatives from the Pahang, Kelantan and Terengganu governments.
When asked who else was on the committee, Nazri said he did not know but it could be decided when the cabinet met next.
On claims by the opposition that they will increase the oil royalty payment to 20 percent compared to five per cent as present in states like Sabah and Sarawak should Pakatan Rakyat wins, Nazri said oil is a precious resource like gold, and that the mining was done by the federal government.
“The five per cent oil royalty to states is a normal rate adopted in other countries and there is no need to increase it to 20 percent. The five per cent is based on world standard and should be sufficient,” he said.
Better late than ever
While Terengganu gets oil royalty, Kelantan has been seeking it for quite a while.
Last November, it was reported that Kelantan senior exco member Husam Musa, said in 1975, the second premier had answered the then 34-year-old MP Lim Kit Siang that states which are signatories of the Petroleum Act 1974, would see royalty paid even if oil was found offshore.
Quizzed as to why the government had decided to fulfill its obligations now, although the Kelantan government had sought it since 2002, Nazri said that was something for Najib to clarify.
“However, as the adage goes, better late than ever.”
Gua Musang MP Tengku Razaleigh Hamzah (right), who was the first Petronas chairperson, has been pressuring the federal government to pay the royalty as it was Kelantan’s right.
The Kelantan PAS led government had also filed a commercial suit in 2010 suing Petronas for non-payment of oil royalty. The case is still pending in court.
Oil is extracted from four identified areas – in Kelantan; Kelantan-Thailand which forms part of the (Joint Development Area between Malaysia-Thailand); Kelantan-Vietnam (Joint Development Area between Malaysia-Vietnam); and the Kelantan-Terengganu border.