KUALA LUMPUR: Wawasan’s Machang MP Wan Ahmad Fayhsal Wan Ahmad Kamal has urged Putrajaya to exercise caution in drawing on Petronas’s resources, warning that uncertainty surrounding Sarawak’s oil and gas framework and tensions in the Strait of Hormuz should be considered when making decisions affecting the national oil company.
He said Petronas must retain sufficient financial strength to invest in future oil and gas projects and respond to potential supply disruptions, rather than being viewed solely as a source of government revenue.
“Petronas has once again become the country’s dependable workhorse,” he said during the debate on the 2027 budget in the Dewan Rakyat.
“Previously, I called it the goose that lays the golden eggs. Put simply, Petronas is the company Malaysia depends on.”
Wan Fayhsal said the government should be cautious about placing excessive demands on Petronas to support the budget.
“At this point, the government is squeezing Petronas to support the budget,” he said.
“I’m not saying this cannot be done. It can. But we must remember that Petronas needs to retain funds for the future, particularly for oil and gas investments which are capital-intensive.”
The 2027 budget projects a RM32 billion contribution from Petronas to the government revenue, equivalent to about 8.4% of the government’s projected RM380.8 billion revenue for next year.
The figure is higher than the RM20 billion dividend provided for in the 2026 budget, although that estimate was later revised to RM27 billion.
Petronas declared RM20 billion in dividends to shareholders in the first half of this year.
Wan Fayhsal said the company’s finances should be assessed against the scale of its current and future responsibilities.
For the first half of 2026, Petronas recorded RM152.4 billion in revenue and RM27.2 billion in profit after tax. Its cash flow from operations stood at RM47.5 billion, while capital investments more than doubled year-on-year to RM41.4 billion.
Those investments included upstream exploration and development activities needed to sustain future production, as well as additional capital injected into the Pengerang refining and petrochemical complex.
Petronas’s cash and funds pool stood at RM193.6 billion as at June 30, down from RM204.4 billion at the end of last year. Its net cash position was RM66.8 billion, the lowest in five years.
Wan Fayhsal said it would be unwise to judge Petronas’s capacity solely by the size of its cash reserves.
“Added to this is the impasse over the gas agreement with Sarawak, with the final outcome still unknown,” he said.
Petronas and the Sarawak government have filed separate petitions in the Federal Court concerning the validity and application of state and federal oil and gas laws.
The dispute is significant because more than 60% of Malaysia's gas reserves are found off Borneo's shores. Petronas has said it is seeking legal clarity over the regulatory framework governing its operations in the state, while Sarawak is challenging the continued application of several federal petroleum laws.
Wan Fayhsal said the government must also consider Petronas’s responsibility to protect domestic fuel supply during the West Asia crisis.
In March, Petronas said nearly 40% of Malaysia’s crude oil requirements transited through the Strait of Hormuz. The company said the crisis had driven up crude prices, shipping costs and insurance premiums, while domestic demand for petrol and diesel continued to exceed local supply.
Petronas said it had mobilised its integrated value chain to secure adequate supply, supporting close to half of the domestic fuel market at the time.
“With Petronas carrying extensive subsidy-related responsibilities, what is its financial health to sustain the national budget?” Wan Fayhsal asked.
“The government needs to explain to the people how Petronas will face the challenges before it while continuing to support the country.”