Petronas should not be accountable to PM alone, Opposition MP says


PKR lawmaker Wong Chen (picture) has called for a review to the Petroleum Development Act (PDA) 1974 and make parliamentary oversight of Petroliam Nasional Bhd (Petronas) necessary to keep the Prime Minister’s (PM) powers over the national oil company in check.

The government, in a recent parliamentary reply, said it has no immediate plans to amend the PDA 1974 — a federal legislation that clearly states the corporation is subject to the control and direction of the PM who may from time to time issue directions he deems fit.

“Time and time again, we know that Petronas has been asked to do ‘national service’. Some of these national duties may have been unavoidable and necessary, but some are the result of poor fiscal discipline and spendthrift attitudes of the Cabinet.

“When the latter happens, Petronas should be accountable to Parliament and in fact, MPs should defend Petronas from any feckless request for funds from the Cabinet,” he told reporters in Parliament yesterday.

“Petronas does not belong to the PM and as such should not be accountable to the PM alone,” he added.

Malaysia’s only Fortune 500 company recently reached an out-of-court settlement with the Sarawak government, ending years of dispute over the payment of some RM1.3 billion backdated sales tax on oil products.

The company’s decision to drop further legal action against the state is widely viewed as a political move that would help PM Tan Sri Muhyiddin Yassin maintain control of the federal administration.

Currently, Muhyiddin’s razorthin majority in Parliament is dependent on Gabungan Parti Sarawak lawmakers who accounted for 18 of the 222 elected seats.

The compromise is expected to see other oil-rich states to follow suit by demanding a bigger share of the country’s oil money.

This could see Petronas’ contribution to federal coffers reduced. Petronas has accounted for more than 15% of the government’s revenue over the last five years.

For the past decade, Petronas has paid RM282 billion in dividend to Putrajaya, out of which RM54 billion was paid in 2019 alone.

The amount paid out last year included a one-off special dividend of RM30 billion, which was used to repay outstanding goods and services tax and income tax refunds.

The company also made payments in cash worth RM59.8 billion to oil-producing states Sarawak, Sabah, Terengganu and Kelantan from 2008 to 2019.

Yesterday, Petronas confirmed that seven of its subsidiaries, including Petronas Carigali Sdn Bhd, would pay Sarawak’s state sales tax (SST) for petroleum products.

The arrears, including penalties for late payment and interests, amounted to almost RM1.3 billion, according to Assistant Minister in the Chief Minister’s Department Sharifah Hasidah Sayeed Aman Ghazal.

Sharifah Hasidah said the subsidiaries identified by Petronas are in the process of being registered with the comptroller as taxable persons who would be liable for payment of SST to the state government.

The registration process should be completed by Aug 15.