Putrajaya has directed national oil company Petronas not to proceed with its appeal after losing a court case and being ordered to pay Sarawak the sales tax amounting to RM2.8 billion, Chief Minister Datuk Abang Johari Openg said today.
He said Petronas had filed an appeal of the High Court’s decision on the application for a judicial review against the imposition of the Sarawak Sales Tax on the import of petroleum products before the change of the federal government from Pakatan Harapan (PH) to Perikatan Nasional (PN).
Malaysia’s energy-rich Sarawak state will pursue legal proceedings against national oil company Petronas over the non-payment of sales tax, backtracking on a settlement agreement reached last month, national news agency Bernama reported.
Petronas and Sarawak had reached a settlement in May, with the energy company agreeing to pay 2 billion ringgit ($470 million) in back sales taxes, and Sarawak agreeing to drop a civil lawsuit it filed last year to seek the funds.
Petronas is still considering whether to appeal against last week’s High Court ruling that Sabah and Sarawak have the right under the Federal Constitution to impose sales tax on petroleum products.
“We have 30 days from March 13 to file a notice of appeal to the Court of Appeal,” said lawyer Malik Imtiaz Sarwar who represents the national oil and gas company.
Last week, judge Azahari Kamal Ramli, who is based in Kuching, dismissed Petronas’ judicial review application to declare the Sarawak state sales tax null and void.
Petronas had claimed that some parts of the state’s Sales Tax Ordinance 1998, which require the national oil company to pay the 5% sales tax on petroleum products to Sarawak, were unconstitutional.
At a dialogue session organised by the Malaysian French Chamber of Commerce and Industry, Prime Minister Dr Mahathir Mohamd played down the state-federal tussle over the 20% oil royalty. The increase was promised to Sabah and Sarawak by the Pakatan Harapan government (PH) if it came to power.
After a long period of procrastination, it is clear and transparent that the PH government has no intention of keeping its promise. The hope for more oil royalty for development funds has now been marked down as another election promise meant to be broken.
THE recent natural gas deal between Petroliam Nasional Bhd (Petronas) and state-owned Petroleum Sarawak Bhd (Petros) is expected to provide a boost to Sarawak’s downstream operations.
The handover of authority over the supply, sales and distribution of natural gas in Sarawak to Petros effective Jan 1 this year has given the fuel-rich state room to manage its resources — which account for 54% of total national gas reserves and 29% of national oil reserves.
Chief Minister Datuk Patinggi Abang Johari Tun Openg is optimistic that the oil and gas (O&G) industry in the state, particularly Miri as the O&G hub, will thrive and help boost the state’s economy.
In referring to the setting up of a new office by a Japanese company JX Nippon Oil and Gas Exploration (Malaysia) in Miri recently, Abang Johari said that it is a good sign as it shows that the oil and gas industry players are slowly coming back to Miri.
Petronas has claimed that some parts of the state Sales Tax Ordinance 1998 which require the national oil company to pay the 5% sales tax on petroleum products to Sarawak are “unconstitutional”.
Petronas lawyer Malik Imtiaz Sarwar.
Therefore, the notice of assessment issued by the Sarawak government to Petronas, seeking payment of the state sales tax on petroleum products, was also considered to be invalid, said Petronas lawyer Malik Imtiaz Sarwar.
Since national oil company Petronas began extracting oil and gas in Sarawak from 1976 to 2017, it had earned a total revenue of about RM660 billion, but only RM33 billion was returned to Sarawak, said Datuk Sharifah Hasidah Sayeed Aman Ghazali.
The state de facto law minister said if Sarawak were to have a hand in its own oil and gas resources since then, it would have been in a better economic position now to attain a high income economy and develop the state by the year 2030.
Petronas today failed in its attempt to disqualify Judicial Commissioner Christopher Chin from hearing the case over Sarawak’s suit for unpaid state sales tax.
Petronas had earlier applied for Chin to discharge himself from hearing the case.
The national oil company claimed that Chin would decide the case to favour the prime minister as his tenure as a judicial commissioner was temporary and was subject to confirmation by the prime minister, who is also the person with ultimate control over Petronas.
Chin, however, said that during his nine months on the bench, he had never been instructed, hinted or urged by his “bosses” — the chief judge of Sabah and Sarawak, the chief justice, or any judge or person for that matter — on how he should decide any dispute.
Ba’Kelalan state assemblyman Baru Bian today expressed his concern at the latest report of a fourth leakage along the Petronas Sabah Sarawak Gas Pipeline (SSGP) which occurred between Long Kawa and Ba Selulung in Mulu, Baram yesterday evening.
“I am also equally relieved that no one was hurt in this major incident,” the federal works minister said.
He said he was informed that SSGP Block Valve 112 was shut down about 2am at dawn this morning, as pressure dropped at both upstream and downstream Block Valve 112, indicating pipeline leakage and rupture.
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