Refine Petroleum Revenue Distribution with Sabah, Says Riduan

27 January 2026

KUALA LUMPUR: The Federal Government has been urged to review and refine the distribution of national petroleum revenues with Sabah in line with the Petroleum Development Act 1974 (PDA 1974), as provided for under the Malaysia Agreement 1963 (MA63).

Tenom Member of Parliament Riduan Rubin said Sabah currently receives a five per cent royalty from petroleum revenues under the provisions of the PDA 1974, but the amount does not reflect the state’s significant contribution to the oil and gas sector.

“This figure does not reflect Sabah’s major contribution to the oil and gas industry, which accounts for nearly 40 per cent of national oil production and about 20 per cent of gas output.

“MA63 is the founding agreement that apportions sovereignty, legislative powers and economic control within the Federation of Malaysia, and its strength lies in its incorporation into the Federal Constitution.

“Under the Constitution, land and natural resources fall under state jurisdiction, a position that has existed since 1963 and remains in force today.

“For Sabah, this authority is further safeguarded under Article 95D, which prevents federal laws on matters under the State List from applying without the acceptance of the State Legislative Assembly,” he said.

He made these remarks during the debate on the Royal Address at the first sitting of the Fifth Session of Parliament in the Dewan Rakyat here today.

Meanwhile, during the same debate, Riduan also touched on the need to add value to the national rubber industry, particularly in the pharmaceutical sector.

“I propose that the Government enhance the value of the rubber industry by exploring new rubber-based industries, such as the pharmaceutical market.

“I am informed that rubber serum contains one to two per cent L-quebrachitol. L-quebrachitol is a component used in the pharmaceutical industry, including in the production of medicines.

“Therefore, I urge the Government to explore this market, which could in turn elevate the rubber industry to a higher level,” he said.