Govt seeks revenue rise from Pertamina for 2002 budget

Dadan Wijaksana, The Jakarta Post, Jakarta

The cash-strapped government is seeking more revenue from the state-owned oil and gas company Pertamina to help finance next year's state budget, according to Finance Minister Boediono.

The plan has yet to be approved by the House of Representatives.

"We intend to seek more income from Pertamina by increasing the government's dividend from the company to 25 percent of annual profits," Boediono said during a meeting with the House budget committee to debate the 2002 state budget draft.

According to Law No.8/1987 on Pertamina and government ruling No.18/1987, the government is entitled to 60 percent of Pertamina's net profits plus a 10 percent dividend from the remaining 40 percent.

Pertamina recorded a net profit of Rp 3.74 trillion (US$370 million) last year.

Should the House approve the plan, a new government ruling willl be required to replace ruling No.18/1987.

"Of course, if the House agrees to the plan then we'll have to establish a new ruling on the matter," Boediono said.

However, the House is unlikely to come up with an approval anytime soon as legislators put up a tough fight against the government's plan during their Friday meeting.

The House questioned the basic assumptions the government had used in developing the plan. They also doubted the government's ability to apply a transparent approach in managing the revenue obtained from the state-owned company.

Pertamina was treated as a cash-cow by corrupt government and military officials under the authoritarian government of Soeharto.

After long and sometimes heated debate, the House decided to suspend the meeting. The debate will resume on Oct.17.

If agreed by the House, it would be another slap in the face for Pertamina just weeks after the government and the House completed debate on the new oil and gas bill, which will put an end to its decades-long monopoly over the lucrative oil and gas industry in the country.

The House is expected to pass the new bill into law later this month.