PAS president Datuk Seri Tuan Guru Abdul Hadi Awang said Prime Minister Tun Dr Mahathir Mohamad is doing the right thing in making sure both Kelantan and Terengganu get the oil royalties they are entitled to.
Hadi was responding to questions by reporters on what discussions went down with Dr Mahathir after Pakatan Harapan (PH) won the 14th general election (GE14) during the launch of Harakah Daily’s new website today.
“The oil royalties were based on an agreement with the federal government and started with the Sabah-Sarawak agreement in 1975. It was decreed that any findings on land and sea must be shared by both state, government and Petronas.
“The agreement was to pay royalty of 10 per cent, five to the state, five to the federal government and the rest for Petronas. It was signed by all the heads of state, ministries and mentri besar,” Hadi explained.
However, in 2000, the Barisan Nasional (BN) government decided to stop payment of oil royalty after it lost the Terengganu state government to PAS in the 1999 election.
From 1978 to 2000, Terengganu received about RM7.13 billion in royalties and reaped other economic benefits.
However, the Umno General Assembly decided to stop the payment and in 2001, the state government took the case to court.
In 2012, a settlement was reached between Petronas, the then federal government and PAS Terengganu state government, but Hadi maintained he was unhappy with what BN did to these two states.
“After GE14 we met with Tun and he corrected the situation, because the cancellation of the royalty was done by Umno and was not legal. Umno had no right to cancel the contract,” said Hadi.
“Tun brought the contract back to life to resume paying oil royalties to Kelantan and Terengganu.”
In GE14, PAS won Kelantan and Terengganu while BN was ousted as the federal government by PH and since then both states have asked for the royalty payments to return.
Recently, Economic Affairs minister Datuk Seri Azmin Ali said the federal government will fulfill its promise regarding royalty payments to oil-producing states after ironing out several technical details.