Petronas will lose money if we give 20%, says Dr M

(FMT) – Prime Minister Dr Mahathir Mohamad today said that fulfilling Pakatan Harapan’s (PH) manifesto pledge on the oil royalty for oil-producing states would be bad for Petronas as it would add to the company’s operating costs and cause it to lose money.

In the PH manifesto, the coalition had promised to increase the oil royalty for Sabah, Sarawak, Kelantan and Terengganu from 5% to 20%.

However, Mahathir said Petronas was the only national oil company in the world that covers exploration, development, production and petrochemicals.

“People from all over the world are asking Petronas to do work in their countries. So if you reduce Petronas to just collecting royalties, we will lose a lot of this.

“We need to maintain the strength of Petronas,” he said, adding that there was also a need to review the 5% cash payment to oil-producing states.

He said the 5% was calculated based on the operating cost which was quite big for the company.

When asked if the federal government would be willing to give up its 5% of the cash payment since it was also collecting dividends and taxes, Mahathir said the government gave back money to the states as well.

“In fact, a lot of states owe money to the federal government which they haven’t paid. These are non-performing loans which means we can bankrupt you if you don’t pay,” he added.

In the end, he said, the people regardless of state should learn to live together and be fair to one another.

He said the federal government was aware of Sabah’s problems and had done much to improve conditions in the state.

“In 1965, the first time I was here (in Sabah), there were no roads outside of Kota Kinabalu. Although (former chief minister) Harris Salleh had a Jaguar, he could only go for 20 miles.

“Now you have everything,” he said, adding that work on the Pan Borneo Highway would continue albeit slowly as the government did not have enough money.