Kelantan strikes 50-50 oil royalty deal with federal govt?

The federal government has struck an agreement with Kelantan to split proceeds from the state’s oil royalty on a 50-50 basis, with Malaysia International Trade and Industry Minister Datuk Seri Mustapa Mohamed saying that half of said proceeds shall be disbursed to the Kelantan State Islamic Council.

"The agreement between the Kelantan Federal Development Department (JPP) and the State Islamic Council was presented to the cabinet two weeks ago, although for now it is still an agreement in principle awaiting official signing," Mustafa was quoted as saying by the Star Online.

Speaking at a press conference in Pengkalan Kubor, Mustafa said that the money will be distributed to the people as “wang ehsan”, with talks on the agreement having already taken place between federal and state government representatives.

The agreement will officially take effect in January 2015, Mustapa said.

• Why are oil royalties given to Sabah, Sarawak and Terengganu, but not Kelantan?