Petronas has again been called to the rescue to help finance Malaysia’s budget which has increased 10.3% to RM314.6 billion. In addition to the regular dividend from Petronas amounting to RM24 billion, Petronas will fork out a special dividend of RM30 billion from its accumulated retained earnings which will be used to pay for, among other things, a RM4.3 billion allocation to Sarawak for 2019 for specific projects, RM1.3 billion more than the previous year. This figure does not include allocations given to the Home Ministry, Health Ministry or Human Resources Ministry for salaries or other running expenditure which is already being provided by the Federal Government.
Sarawak is expected to receive the guaranteed 5% royalty in 2019 amounting to RM1.58 billion (which is about the same amount it was entitled to receive in 2018 based on the current oil price of US$70 per barrel). If you add the royalty plus the allocation they add up to approximately RM6 billion which is equivalent to what 20% royalty.
The state budget for 2018 was set at RM8.3 billion of which RM5.8 billion or about 70 per cent of the total budget was proposed for development expenditure. RM2.5 billion or 30 per cent of the total budget, was proposed for operating expenditure.
The problem is the expenditure of RM5.8 billion is not evident inSarawak anywhere you look. With the Pan Borneo highway, rebuilding of roads andschools, hospitals and airports undertaken with the annual Federal allocation,the RM5.8 billion development budget seems to have disappeared into thin air. The demands for moreroyalty for development needs more transparency of where the money would go. Theever increasing costs to get at increasingly challenging oil and gas fieldsareas needs more investments. It would be counter-productive for oil producingstates clamouring for more oil royalty simply for private or political spendingby their leaders. It is the last thing that the nation and Malaysians need atthe moment.
Contributor: JWong, Concerned Sarawakian