KUALA LUMPUR: The oil royalty payment made to the Kelantan government is done according to the old method, says Economic Affairs Minister Datuk Seri Azmin Ali.
He was responding to Kelantan Menteri Besar Datuk Ahmad Yakob’s claim at the state assembly today that the state government had received “wang ihsan” (compassionate money) from the Federal Government instead of royalty payment.
Azmin said the government had agreed in principle to channel funds related to oil production straight to the state government’s coffers as it was its constitutional right.
However, Azmin said he was unable to confirm whether the funds channelled was the 20 per cent royalty payment promised by Pakatan Harapan in its 2018 manifesto.
“We will have to check that as the 20 per cent royalty is still in discussion.
“For now we are using the old method and it will not be handled by the Federal Government, rather (it is) being paid straight to the state government as it is its constitutional right.
“I am not sure about the allegation that it was wang ihsan as PH’s principle is to channel the fund straight to the state according to the set rate,” he said at the Parliament lobby here today.
Currently, the government pays five per cent of oil production money to oil-producing states as determined by Petronas.
Azmin said the royalty payment process involved Petronas channelling the funds to the Federal Government and subsequently it would be channelled to the state governments involved.
Earlier today, Ahmad said Finance Minister Lim Guan Eng’s statement on the royalty payment was untrue and had caused confusion among the people.
He said the state government had received RM15,749,561.50 advance payment on Sept 17, which was compassionate money.