Sabah, Sarawak Told to Ask for 25pc Oil Royalty

KOTA KINABALU: Sarawak and Sabah should ask the Federal Government to raise oil royalty from the present 5 to 25 per cent effective from Jan 1 this year.

Former Sabah chief minister Datuk Harris Mohd Salleh said in a letter dated Sept 2 that the Sabah and Sarawak state assemblies should pass a motion at their next sitting.

The letter, which was addressed to the chief ministers and assemblymen of the two states, was made available to the media yesterday.

Harris listed three reasons for the request.

The first being that Parliament had in 1974 passed a law taking over all oil and mineral resources from the states, which left Sabah and Sarawak with no alternative but to sign an agreement for 5 per cent oil royalty.

The second is that since 1974, the price of crude oil has gone up four fold.

Harris’ third argument is that many of the federal government projects in the two states were not urgent. He also felt that the projects, which were awarded through negotiated tenders, cost twice as much as open tender projects.

“It is in the interests of Sarawak and Sabah to request for an increase of oil royalty from the Federal Government and Petronas.

“This is more so when the Federal Government acknowledges that the Sarawak and Sabah governments need a lot of funds for development and are still far behind compared with other states.”

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