KUALA LUMPUR, Oct 28 — The government should increase Sabah’s oil royalties from 5 per cent to 20 per cent instead of giving it in the form of “special cash payment” and “operating expenditure”, a Sabah lawmaker said today.

Penampang MP Darell Leiking said it is time the federal government reviewed the oil royalties to Malaysia’s second largest state as the Petroleum Development Act 1974 was made at a time when Sabahans were “not so savvy in negotiations” and were pressured to agree to the 5 percent royalty.

“It is time to review the percentage of the oil royalty, you can’t just give us 5 percent, to me... you have to abolish the cabotage in Sabah.

“Since Pakatan has asked for 20 per cent and you promised in PRU 13 that you’ll spend up to 20 per cent, you might as well make it fixed at 20 per cent,” he told reporters at the Parliament lobby.

In a written reply to Bagan MP Lim Guan Eng, the Prime Minister’s Office denied allegations that it reneged on its promise made during the last general election.

“The allegations that the oil royalties were not increased from 5 per cent to 20 per cent as promised in the 13th General Election is inaccurate.

“One of the Barisan Nasional manifesto for GE13 is to continue the special cash payment and provide funds for operating and development expenditure of more than 20 per cent from the oil and gas royalties,” it said.

The cabotage policy was imposed in 1980 by the federal government in a bid to integrate all Malaysian maritime laws under the Ministry of Transport.

Under the existing policy, only Malaysian-flagged ships are allowed to transport locally-manufactured goods from the peninsula to Sabah.

The policy created a shipping cartel charging excessive costs and ultimately brought about a higher cost of living in East Malaysia.

Leiking said the oil royalties received by Sabah from 2007 to 2012 add up to about RM4.4 billion.

Meanwhile, the 5 per cent oil royalty that the state received in 2012 amounts to RM941 million.

Lim, who is also the DAP secretary-general, said it is unfair for BN to brush off the 15 per cent additional oil royalties demanded by Sabah and equate it to other forms of financial aid to the state.

“[BN] said as long as they spend more than 20 per cent, that’s enough, but I said that is not fair because when you talk about oil, it’s just oil. If you talk about spending 20 per cent, then what about in the form of logging, palm oil, and other exports out of Sabah and Malaysia?” he asked.

Under the Petroleum Development Act 1974, the federal government can amend the terms of the Federation Agreement, which states that land and all that is in and under it belongs to the state and not the federal government.

The law states that all findings will be under Petroliam Nasional Berhad’s (Petronas) custodianship, and that there will be a 5 per cent royalty payment to the federal government and a 5 per cent royalty payment to the state government.