KUCHING: The Sarawak government will fight to the last to protect the state’s rights to its oil and gas resources.
Chief Minister Datuk Patinggi Abang Johari Tun Openg assured Sarawakians that the government was firm on its stand and urged them to bear with him while he continued the fight.
“Under the Sarawak Constitution, we have Item 2(c) of List II of the State List in the Ninth Schedule of the Federal Constitution which gives us the right to impose the 5 percent sales tax on petroleum products.
“A lot of people asked why last time it was not imposed? That, I don’t know. I was not the chief minister then. But now you see we have the rights (to our oil and gas resources),” he said during a business engagement session organised by Sarawak Business Federation (SBF) at Borneo Convention Centre Kuching (BCCK) yesterday.
He disclosed that when the state received revenue from the sales tax it would be invested in the development of its infrastructure as Sarawak is one of the least developed states in the country.
Later during a question-and-answer session, Abang Johari said, “What is RM3 billion from the sales tax compared to RM40 billion that Petronas gets annually from the oil and gas extracted from the state?”
He added that the state could have imposed a bigger sales tax of 10 percent but taking into consideration various issues in the petroleum industry, the state only imposes 5 percent.
“Assuming that they want to reduce the sales tax because of economic circumstances, I agree, but we must get the equivalent which must be through commercial arrangement,” he said.
He revealed that what could be done was to increase the state’s equity in liquefied natural gas (LNG) which is currently at 25 percent.
“In other words, we can participate in upstream as well as downstream activities of our oil and gas industry.
“And in terms of production sharing, we would like to participate in its formula as long as the resources are in Sarawak waters,” he said.
He stressed that as the oil and gas are in Sarawak waters the state must have a say in the industry.
“So now the arrangement is being negotiated (with the fe-deral government) and I hope things would be alright. But bear with me I will fight to the last,” he said.