KUALA LUMPUR (April 8): The federal government has disbursed RM172.3 million in oil royalty payments to the Terengganu state government and RM58.6 million to the Kelantan state government in the last week, the Ministry of Finance (MOF) said on Monday.

A further RM103.1 million has been allocated by the federal government to fulfil Terengganu's obligations to its contractors, the ministry said in a statement. Both Kelantan and Terengganu are led by opposition party PAS.

"Any remaining oil royalty would continue to benefit the people of Terengganu and Kelantan through various projects and programmes aimed at poverty eradication and enhancing basic infrastructure for their well-being," the ministry said.

MOF emphasised the federal government's commitment to fairness and equity in funding distribution among all state governments, as evidenced by increased federal government grants and development allocations for every state in 2023 and 2024.

These allocations include monthly disbursements of grants to all states simultaneously, it added.

Despite oil royalty payments not being mandated by law, MOF noted that the federal government channelled a total of RM786 million to the Terengganu state government and RM200 million to the Kelantan state government in 2023.

"The federal government is committed to ensuring that oil royalty payments are utilised for the benefit of the states of Terengganu and Kelantan, with priority given to spending that truly helps the people of Terengganu and Kelantan," it said.

The government remains open to discussions with the state governments of Terengganu and Kelantan over the use of oil royalty to directly benefit the people in the states, said Prime Minister Datuk Seri Anwar Ibrahim, who also serves as minister of finance.