KUALA TERENGGANU, Oct 16 — The Terengganu government today confirmed that it had received RM1.277 billion in petroleum royalty since January until September this year.

Mentri Besar Datuk Seri Dr Ahmad Samsuri Mokhtar said the state government was thankful to the federal government for channelling the oil royalty although the debt reduction rate for Terengganu was rather high at 25 per cent.

"Alhamdulillah (praise be to Allah), RM1.277 billion is the amount after the Finance Ministry deducted the state’s debt at 25 per cent or RM129 million. 

"When we first took over the state’s administration (in May 2019), the state government’s debt was at more than RM700, and after the 25 per cent deduction, the balance is expected to be fully settled by next year.

"Hence, Terengganu will be one state with no debt with the federal government (if the Finance Ministry continues with the deductions),” he told reporters after chairing a state executive council meeting, here, today.

However, he said, the state government was still trying to negotiate with the Finance Ministry to reduce the deduction rate of 25 per cent to a more reasonable rate.

"Although in the long term, this is definitely something positive for the Terengganu government and its financial state (debt-free). But for year 2020, Terengganu will be facing the most challenging situation as we have a commitment of RM403 million in deferred payment and scheduled payment.

"This is the highest amount, overall. That’s why we are still trying to negotiate with the Finance Ministry to reduce the debt deduction of 25 per cent,” he added.

Asked on the statement by Kelantan Mentri Besar, Datuk Ahmad Yakob that the RM15.7 million received by Kelantan from the Finance Ministry was compassionate payment (wang ihsan) and not oil royalty,  Ahmad Samsuri said he did not know what exactly was being communicated between the two parties.

"I am not sure whether it is about payment or channelling of allocations from the federal government to the state government, but usually every payment made will have a breakdown.

"Is the amount based on the number of residents or is it a payment? This has to be stated,”  he said. — Bernama