Sarawak DAP chairperson Wong Ho Leng wants the agreement between the state and federal governments on the 5% royalties on oil and gas for Sarawak to be reviewed.

"A review should be demanded when the oil price is high and before our reserves goes shallow," the party's state assemblyperson for Bukit Assek said during the debate on the 2008 State Budget yesterday.

Instead of raising land premiums to extend or renew land leases, imposing additional burden on Sarawakians, a more legitimate means would be to demand the federal government to double the oil and gas royalties, he added.

'The present 5% royalty is too low. Even by doubling the amount, our revenue would have increased by another RM1.351 billion ( Sarawak's 2007 revenue from oil and gas: RM1.351 billion),' he said.

Wong said when Sarawak and Sabah joined up with the other states to form Malaysia in 1963, the federal government accorded the two Borneon states special privileges and autonomies as contained in the Malaysia Agreement.

But much of these privileges have been eroded over time, he said, suggesting that Sarawak has not been well looked after by the federal government.

"The federal allocation of RM4 billion for the implementation of development projects in the state can hardly be adequate. We lag behind Peninsular Malaysia in development despite the fact that our state is rich in resources and contributes most significantly to the federal coffer,' Wong said.

"Sarawak deserves better. Due to the need for revenue, landowners in Sarawak will be asked to pay high premium when they apply to renew their titles," he said, referring to the state government's recent decision to charge new premium of between 25% and 40% rates for land lease renewals.

Legitimate right

As a net oil exporter Malaysia gains when international oil price increases, he said, adding that an increase of US$1 per barrel will enable Malaysia to earn an extra RM250 million.

"Considering that about 1/3 of Malaysian oil comes from Sarawak, we must consider that we have a legitimate right to demand to review the outdated agreement between Sarawak and the federal government," he added.

In the previous sitting in the state assembly, the state Second Finance Minister Wong Soon Koh said that there had been many rounds of negotiation and the state would continue to negotiate for an increase in the royalties on oil and gas.

But recently Chief Minister Abdul Taib Mahmud was quoted as saying that 'Sarawak is happy with the 5% royalty.'

"Should that be the case, one of the ministers must be lying," Wong said.

"Were there negotiations to review or not, and what is the status of the negotiations? The ministers must explain," he added.