PAS has welcomed the Pakatan Harapan-led federal government's decision to channel at least five percent in oil royalty straight to state governments instead of a federal agency.

Its president Abdul Hadi Awang said this is because the pledge is in line with earlier promises between the federal government and oil producing states, around the year 1970.

However, Hadi said he will wait for an official announcement from Prime Minister Dr Mahathir Mohamad on the matter.

"Alhamdulillah, the prime minister has spoken (about oil royalty) and I will await his official announcement that oil royalty will be restored.

"If it gets restored, we will accept it," he told reporters at his home, after a sermon session in Masjid Rusila in Kuala Terengganu today.

He was responding to a news report about oil royalty restoration to oil-producing states like Kelantan, Terengganu, Sabah and Sarawak.

Terengganu Menteri Besar Ahmad Samsuri Mokhtar yesterday said that the federal government has agreed to channel oil royalty of at least five percent, to the state.

According to him, Prime Minister Dr Mahathir Mohamad had notified that oil-producing states will have the royalty payment channelled straight to them.

Currently, Sabah and Sarawak get five percent royalty while Terengganu and Kelantan only receive wang ehsan (compassionate payment) from the federal government.