KUALA LUMPUR: Former Petroliam Nasional Bhd (Petronas) chairman Tengku Razaleigh Hamzah stressed today that the federal government was not at liberty to "distribute as largess" the proceeds from oil and gas production because such gains rightfully belonged to the people.

Razaleigh told reporters there was "no such thing" as wang ehsan ("goodwill money"), in reference to Prime Minister Datuk Seri Najib Razak's announcement on Nov 3 that the federal government will pay wang ehsan to Kelantan.

"Oil is not for the federal government to distribute as largess. The government can distribute from the revenue collected from taxes and that is the prerogative of the federal government — but when it comes to this, it is the rights of the people," Razaleigh said.

Asked if Najib was wrong in the announcement, the Umno veteran smiled and said: "Well, that's up to you to interpret."

Tengku Razaleigh (Gua Musang-BN) added that the people had constitutional rights over proceeds for oil and gas found onshore or offshore, based on the agreements signed between Petronas and the states.

The long-serving member of parliament revealed that Pakatan Rakyat (PR) had invited him to head a parliamentary caucus on the "hot subject" of oil royalty with a view to arriving at an "amicable solution to the problem".

This was likely discussed during Tengku Razaleigh's meeting with PR leader Datuk Seri Anwar Ibrahim (Permatang Pauh-PKR), PAS vice-president Salahuddin Ayub (Kubang Kerian-PAS) and PKR election director Saifuddin Nasution (Machang-PKR).

The half-hour meeting took place at the MPs lounge in parliament today afternoon.

However, Tengku Razaleigh said he had not given an answer and declined to state when he would announce his decision.

"I'll be following the developments to see if I can contribute because after all I was involved in the oil business starting with the formation of Petronas, negotiation with the states, drafting of the laws," he said.

Tengku Razaleigh, who was founding chairman and chief executive of Petronas from 1974, was involved in negotiations between the national oil corporation and the states.

The former finance minister also played a key role in designing the Petroleum Development Act 1974.

Tengku Razaleigh had been speaking up in support of Terengganu's and Kelantan's rights to obtain 5% royalty for oil and gas, whether found offshore and onshore, rather than mere compassionate payment.