Kuala lumpur: The Ministry of Finance (MOF) has firmly denied accusations that Petroliam Nasional Bhd (Petronas) has been appropriating up to 95 percent of the petroleum revenue from the regions of Sabah and Sarawak.

According to BERNAMA News Agency, Finance Minister II Datuk Seri Amir Hamzah Azizan clarified that Petronas’s profit margins are significantly lower than 10 percent when factors such as operating costs, exploration capital, production capital, and sales tax are considered. He explained that the petroleum sector operates under production sharing contracts (PSCs) between Petronas and its investors.

Amir Hamzah detailed that under any PSC, Petronas is mandated to make fixed cash payments of five percent each to the Federal Government and the respective state government based on gross production. “After accounting for these 10 percent payments, approximately 80 percent of the revenue is allocated for covering production-related costs, including operating expenses, exploration, and production capital,” he stated during a Special Chamber session in the Dewan Rakyat.

Furthermore, Amir Hamzah highlighted that the remaining 10 percent of the revenue is the gross allocation shared between Petronas and the investors post-tax. He also mentioned that state governments impose an additional five percent sales tax on petroleum products, which is not reflected in the aforementioned figures.

The Finance Minister was responding to concerns raised by Chiew Choon Man (PH-Miri) over claims alleging that Petronas has been taking up to 95 percent of the petroleum revenue from Sabah and Sarawak, with these states reportedly receiving only five percent in royalties over the past five decades.