Sarawak should reject the RM2.95 billion from Petronas

Chong Chieng Jen, DAP Sarawak

KUCHING: State Democratic Action Party (DAP) chairman Chong Chieng Jen has regarded the RM2.95 billion payment of State Sales Tax (SST) from Petroliam Nasional Berhad (Petronas) to the Sarawak government as “a trade-off” for the state’s rights over its oil and gas.

The Stampin MP and Kota Sentosa assemblyman opined that by accepting the payment, the state government had surrendered its oil and gas rights to the federal government.

“This is the second time that the current GPS (Gabungan Parti Sarawak) or the previous BN (Barisan Nasional) reaffirmed the validity of the Petroleum Development Act (PDA) 1974, which took away Sarawak’s oil and gas rights in return for a fraction of its value and worth.

“The first time the Sarawak government surrendered Sarawak’s oil and gas rights to the federal government happened in 1974 when the PDA 1974 was tabled and passed in Parliament,” he said in a statement today.

Chong said former chief minister, the late Pehin Sri Adenan Satem, after 40 years, openly questioned the invalidity and unconstitutionality of PDA 1974 and wanted to regain Sarawak’s rights over its oil and gas.

With the agreement of the current Sarawak government now accepting the payment of SST in settlement of the dispute over Sarawak’s oil and gas rights, the DAP lawmaker said the state government had for the second time affirmed the validity of the PDA 1974.

“It thus spells the end of whatever legal argument that the late Adenan Satem had earlier put forth in the Sarawak DUN (State Legislative Assembly) in claiming our oil and gas rights.

“It also puts to a stop to the demand for increasing the oil and gas royalty. More importantly, it will prevent future generations from claiming our oil and gas rights,” asserted Chong.

He said the GPS state government wanted to portray that the collection of the RM2.95 billion SST was a victory, but he feared that Sarawak had lost more than the RM2.95 billion collected.

He was quick to add: “It could be a second time the Sarawak government is being penny wise, pound foolish.”

He said the situation now was akin to that back in 1974 when the PDA was passed with Sarawak given the five per cent royalty in compensation of its rights over the oil and gas.

It was then thought that the five per cent royalty was a good bargain for Sarawak, but only later found to be grossly inadequate, he said.

“Furthermore, what the federal government gives through Petronas in terms of SST, it can always balance off by reducing the annual budgetary allocations for Sarawak.

“It is just from the left pocket to the right pocket. Meanwhile, we lost our claim over our oil and gas forever,” pointed out Chong.

As such, he urged the Sarawak government to be forthcoming to the people of Sarawak in disclosing the full extent of the bargain.

On Thursday, Petronas and its subsidiaries handed over a cheque for RM2.95 billion to the Sarawak government as payment for the SST on petroleum products.

At a press conference held in conjunction with the handover, Chief Minister Datuk Patinggi Abang Johari Tun Openg said: “Petronas and its subsidiaries have fully settled the payments of SST on petroleum products for 2019, as assessed by the Comptroller of SST in accordance with the provisions of the Sarawak State Sales Tax Ordinance, 1998. The amount paid by Petronas and its subsidiaries is RM 2,956,671,407.36.”

He also thanked Shell, Murphy Oil, Pertamina and Sapura OMV who had earlier complied and settled the SST due to the state totalling RM138 million.

Abang Johari added that the state government would now focus on discussions with the federal government to reach a commercial settlement on other matters relating to oil and gas found and produced in Sarawak.