The federal government cannot determine the amount and method of giving compassionate money (wang ehsan) to Kelantan until oil output in the state has been determined by Petronas.

NONE International Trade and Industry Minister Mustapa Mohamed said what was certain was that the amount would not be the same as that given to Terengganu, Sabah dan Sarawak.

This, he said, was because half the country's petroleum output was from the three states.

"Till now the government has not been able determine the allocation of compassionate money for Kelantan," Mustapa said.

The Kelantan Umno liaison committee chairperson said although there were various assumptions made about compassionate money and oil and gas royalty in Kelantan the amount and method of payment will only be determined after Petronas' study.

Prime Minister Najib Abdul Razak on Nov 4 said Kelantan will receive compassionate payment from the federal government in place of oil royalty beginning next year.

However, Kelantan Menteri Besar Nik Abdul Aziz Nik Mat wants the federal government to fulfill the royalty demand and may take the matter to court if the federal government does not comply.

Amount will not be big

Commenting on the issue, Mustapa said: "For sure the amount will not be big, not like Terengganu, Sabah and Sarawak, as Kelantan does not qualify for the royalty as the oil exploration area was located in the Malaysia Thailand Joint Development Authority (MTJDA) area between Malaysia and Thailand where production is shared 50-50."

On the willingness of former finance minister Tengku Razaleigh Hamzah to cooperate with the Kelantan state government on the royalty demand, he said he was of the opinion that everyone had a right to give their view.

"The federal government's stand will be based on Petronas' study. According to Malaysian law one qualifies for royalty if the petroleum was produced within three nautical miles of the coastal line.

“This is the government's stand subject to Malaysian laws and we have ways to handle the problem," he said.

Meanwhile, deputy chairperson of the Kelantan Umno liaison committee, Awang Adek Hussin, said the action by Opposition Leader Anwar Ibrahim to table a private member's bill on the royalty issue showed that the opposition was not confident the royalty demand would be in their favour according to the Petronas Act 1974.

"So we must accept the fact that actually Kelantan according to law does not qualify for the royalty so that is why he wants to table the amendment bill for the act," he said. - Bernama