KUALA LUMPUR (Oct 9): Petroliam Nasional Bhd (PETRONAS) is expected to contribute RM32 billion to the federal government's non-tax revenue, along with Bank Negara Malaysia's RM7 billion and Khazanah Nasional Bhd's RM3 billion.
The federal government also anticipates RM6 billion in sustained contribution from civil service pensions fund KWAP to partly finance the retirement charges, which is estimated to be higher at RM44.59 billion in 2027 compared with RM42.8 billion in 2026, according to the Finance Ministry's Fiscal Outlook and Federal Government Revenue Estimates Report.
In total, the four entities will be contributing RM48 billion next year.
For 2026, the report states that dividend from PETRONAS has been revised to RM27 billion, compared with the original RM20 billion.
It is understood that the RM32 billion contribution from PETRONAS includes an annual cash dividend. The bigger contribution comes despite a lower oil price assumption of US$78 per barrel in 2027, compared with US$85 per barrel for 2026.
Brent crude has surged more than 40% from about US$70 per barrel at the start of year to hover around US$100 for most of 2026 due persistent supply concerns arising from the Iran war.
At time of writing, the benchmark oil price was at US$103.20 per barrel.
Threats to oil shipments through the Strait of Hormuz — a key shipping chokepoint through which 20% of global energy supplies usually passes through — have been ongoing as the US-Israeli conflict with Iran enters its eighth month.
Historically, PETRONAS' dividend payments have fluctuated with oil prices, government fiscal requirements and the company's earnings. The proportion of PETRONAS' contribution to total government revenue is also closely watched as a signal of Putrajaya's fiscal space and spending discipline.
PETRONAS paid a record RM54 billion to the federal government in 2019, comprising RM24 billion in regular dividend and a RM30 billion special dividend, which was used to settle outstanding goods and services tax (GST) and other income tax refunds owed to individuals and businesses. This payout made up about 20% of government revenue that year.
The second-highest dividend came in 2022, when Petronas paid RM50 billion to the government, making up about 17% of government revenue. The RM50 billion comprised PETRONAS' scheduled RM25 billion dividend and an additional RM25 billion following a request from the government in light of an unexpectedly high subsidy bill caused by a spike in oil prices after Russia's invasion of Ukraine. The payout came as Brent crude averaged above US$100 per barrel that year, while the company’s net profit exceeded RM100 billion for the first time at RM101.6 billion.
Since then, the dividend has moderated to RM40 billion in 2023, making up 12.7% of government revenue, and RM32 billion in both 2024 and 2025, comprising 9.9% and 9.6% of government revenue respectively.
For 2026, the RM27 billion expected from PETRONAS will make up 7.4% of the government's projected income.