For decades, oil-producing states like Kelantan and Terengganu have demanded direct cash royalties from Petronas. The Federal government often withholds these payments, converting them into "Wang Ehsan" (goodwill money) managed by federal agencies, arguing the oil is drilled outside state waters. Proponents argue this denies states their constitutional rights and development funds. Opponents argue federal control is necessary to ensure the money reaches the people rather than political coffers.
