New evidence found on kerosene surcharge

The Jakarta Post, Jakarta

The saga over the back-door imposition of a surcharge on kerosene by the government continued on Friday, with a lawmaker leaking a letter of agreement detailing the sharing out of the proceeds of the surcharge between the government and private sector.

The disclosure came a day after Minister of Home Affairs M. Ma'ruf denied knowing anything about the surcharge, despite a circular issued on this matter by his ministry on Oct. 3.

The circular, apparently signed by Ma'ruf, ordered the imposition of a Rp 50 surcharge on every liter of kerosene sold to consumers.

"This agreement deals with cooperation in monitoring, supervision, dispute settlement and evaluation in respect of kerosene distribution between local administrations, certain institutions and the Oil and Gas Business Association (Hiswana Migas)," lawmaker Ramson Siagian said while reading out the letter.

The agreement, which he said had been issued by a regency administration in Sumatra, bore three signatures as well a stamp, and consisted of a several articles.

"Article 2 stipulates that Rp 30 per liter will go to the local administration, Rp 10 to the Oil and Gas Business Association, and Rp 10 to two institutions," added Ramson, who represents the Indonesian Democratic Party of Struggle (PDI-P).

He declined to name the local administration, the institutions or those who had signed the agreement, but said that the surcharge had produced at least Rp 1.4 billion in proceeds so far since the letter was issued on Oct. 4.

"The agreement states that it was entered into based on the ministerial circular. So it's a mystery if the home minister says he knows nothing about it," Ramson said.

The House leadership sent a letter on Thursday to Ma'ruf demanding that he immediately revoke the circular following a recommendation by the House energy commission.

The House said that the surcharge only worsened the lot of consumers, and argued that it was illegal and unaccountable due to a lack of clarity over how the proceeds were to be used.

"Thus, I would call on the President to instruct the Development Finance Comptroller to investigate the case," said Ramson.

In the two months since the circular presumably took effect, the government is likely to have made around Rp 90 billion from the surcharge, with average kerosene consumption totaling 900,000 kiloliters per month.