PDI-P urges probe into 'kerosene fee'

Tony Hotland, The Jakarta Post, Jakarta

The Indonesian Democratic Party of Struggle (PDI-P) wants an investigation launched into the collection of a Rp 50 (0.5 U.S. cent) fee for every liter of kerosene sold, as it is unclear where the funds go.

The party sent a petition on Tuesday to the House of Representatives leaders to invite the Corruption Eradication Commission (KPK) to look into the case.

A letter issued by Minister of Home Affairs M. Ma'aruf on Oct. 3, rules the highest retail price for kerosene is Rp 2,275 per liter comprising a base price of Rp 2,000, a certain profit margin for retailers, transportation costs and an additional Rp 50 fee for "supervision and administration" purposes.

But House budgetary committee member from PDI-P, Ramson Siagian, who also sits on Commission VII on energy, said the Rp 50 charge, which presumably would go to the government's coffers, was never reported nor was it calculated during the deliberation of the 2006 state budget, which was recently passed into law.

This "illegal" charge was identified on Monday during a hearing between Commission VII and Minister of Energy and Mineral Resources Purnomo Yusgiantoro and state oil company PT Pertamina.

"Thus, the commission concluded at the end of the hearing that the letter of the home ministry should be revoked because it violates the law," Ramson said.

Issued shortly after the new domestic oil prices took effect on Oct. 1, the letter was addressed to all governors, regents and mayors.

It was also forwarded to the President, the Vice President, the chief welfare minister, the chief economic minister, the finance minister and Purnomo's office.

In his calculation, Ramson said, at least Rp 90 billion had been collected so far from this levy with an average of 900,000 kiloliters of kerosene being sold each month.

If this continues, he added, at least Rp 500 billion would have been collected from the sales of next year's quota of 10 million kiloliters of kerosene.

"Such a levy should have been calculated as state revenue from non-tax sources. But it was never reported during the 2006 state budget deliberations. So where is it going to?" he questioned.

Ramson said energy minister Purnomo had acknowledged such a levy during Monday's hearing, but claimed he was unaware that the practice was in violation of the finance law.

"Besides, how could the government still impose such a levy, however little it may seem, after the kerosene price has been significantly raised from Rp 700? It's the poor we're talking about here," the lawmaker said.

Neither the energy minister nor the home minister was available for comment on Tuesday.

Amid skyrocketing global oil prices, the government raised in early October the domestic oil prices by up to 185 percent in order to reduce the fuel subsidy.

Fuel prices were also raised in March this year. The two increases were met with strong public criticism and demonstrations.