How much is Anwar's 20% fuel royalty?

Dear Uncle Yong,

I learnt of your discussion with Anwar in Hong Kong where you must have been attracted with his offer of 20% in oil/gas royalty to Sabah.

Well, certainly your call to the PM to accede to some of your demands, including the 20% royalty, and your intention to move a motion of no confidence in his leadership have Malaysiakini writing on Yong becomes folk hero in Sabah.

Congratulations. Though we already have The Hero of Reformasi or rather more correctly, Deformasi, we can always accommodate another hero.

Meanwhile, in Asia Sentinel, Joe Fernandez, an educationist, former newspaper editor and ex-civil servant in Malaysia wrote about Anwar’s False Promise on Fuel Prices.

Fernandez started off by lambasting Anwar’s attempt to reintroduce fuel subsidies in Malaysia as grossly irresponsible.

Of course Anwar knows, you know, I know and almost everyone knows that if Anwar becomes PM, it's most likely he won’t do it because it’s just a populist promise, merely saying things that people wants to hear. He will undoubtedly come up with another excuse, blaming everyone under the sun except himself.

On second thoughts, Anwar might just do it (reduce the fuel price) as we know he was a lousy Finance Minister anyway, as told to us by in this well researched article by the Jebat Must Die blogsite.

Mind you there is a third possibility. Malaysiakini columnists Ong Kian Ming and Oon Yeoh said that it could be possible that Anwar may, say, reduce the fuel price from the current RM2.70 (rather than the price of RM1.92 when he made his promise) to, say, RM2.50 or RM2.20 and then claim he has fulfilled his promise – well …….. ;-) ........

Anyway, back to Fernandez of Asia Sentinel who continued:

This is not the first time that Anwar has grossly misled the public in making pledges by referring to his "credentials" as a former Finance Minister for so many years.

In the run-up to the March 8 general elections and in its aftermath, Anwar promised the oil-producing states of Terengganu, Sabah and Sarawak that he would increase up their current royalty of 5 percent to 20 percent, and at one stage even 40 per cent, if and when his Opposition Alliance was to seize the reins of power from …....

How Anwar would manage the 20 percent pledge is a mystery. ……..

In Malaysia, under the Production Sharing Contracts, 70 percent of oil barrels are recovered as cost oil by the contractor concerned. The remainder 30 percent is shared equally between the oil contractor and Malaysia, with each party getting 15 percent.

Malaysia's 15 percent is split 2:1 with 10 percent going to the federal government, and held by national oil corporation Petronas, and five percent paid by Petronas to the oil states concerned on behalf of the federal government.

Hence, from where does Anwar get the magical royalty of 20 per cent to the oil states?

Well Uncle Yong, this is not the first time these set of figures have been raised, but then, each time an anwarista would quickly argue that Anwar meant 20% of what Malaysia would get rather than 20% straight from the Production Sharing Contracts.

Uncle Yong, kaytee is not very smart at maths so I cheated by using a Casio calculator and gasp, gawd, omigosh I came up with the answer that 20% of what Malaysia would get (basically 15% of the Production Sharing Contracts) is only 3%!

3%! Yes man, only 3%!

Now Sabah and Sarawak each is already getting 5% but according to my silly calculations, under the Anwar’s amazing 20% promise, that would turn out to be a far smaller 3%.

Could that be – no, no, no it can’t, surely not from the world’s greatest economist? Definitely must be my mistake!

Yours sincerely,

Kuai Larn Knia