ISSUES about petroleum royalties and disparities in prices of goods have been identified as among the reasons for strong regional sentiments among the people of Sabah and Sarawak.

Unity, Culture, Arts and Heritage Minister Datuk Shafie Apdal said these issues had been "blown out of proportion" by those who did not understand the history of the formation of Malaysia as a nation and the special rights of Bumiputeras.

Shafie said the government was aware of the issues affecting both states, as the federal leadership had acted on some of the issues raised, such as the scrapping of the Federal Development Department in Sabah.