Regions demands payment of oil revenue
Fitri Wulandari, Jakarta
The country's oil and gas producing regions demanded on Tuesday that the central government disburse their share of oil and gas revenue totaling Rp 2.73 trillion (US$294.66 million).
The regions also rejected a proposal to share the burden of the fuel subsidy with the central government, arguing that it was the central government's responsibility.
"We need the (oil and gas) revenue to finance our development programs. There are roads to be built, school buildings to be repaired but we can't do it due to the lack of cash," Alex Noerdin, chairman of the Consultative Forum of Oil and Gas Producing Regions (FKPDM), told reporters in a press conference.
He said the regions were all very much reliant on oil and gas revenue and the late disbursement of the funds had forced the regions to delay some projects, Alex said.
According to Alex, the government had not paid some Rp 451 billion in revenue for the fourth quarter of last year, and another Rp 2.28 trillion for the first quarter of this year.
"The funds should be disbursed to the regions every quarter. But the central government has always been late," said Alex, who is the regent of Musi Banyuasin, in South Sumatra.
Regions are entitled to a revenue share from oil and natural gas following the introduction of regional autonomy law in 2001.
The share is 15 percent for oil and 30 percent for natural gas from the total actual oil and gas revenue received by the central government after the revenue of oil and gas contractors is deducted.
The regions' share is set each year based on oil and gas production and the oil price assumption in the state budget. However, the revenue will be adjusted to actual crude prices.
Andang Bachtiar, an expert staff at FKPDM said the regions should receive a total of Rp 9.1 trillion in revenue this year. It was lower than the Rp 10.7 trillion in 2003 and Rp 11.1 trillion in 2002.
The funds are disbursed to some 440 regencies and city administrations. Regions who have oil and gas resources receive a higher revenue than those who do not.
Elsewhere, Alex said the forum rejected a proposal to share the burden of the costly government fuel subsidy program.
"It is the responsibility of the central government. The revenue sharing is not related to the fuel subsidy," he said, adding that the central government should be more creative in seeking ways to resolve the rising cost of the fuel subsidy.
The central government had projected that the fuel subsidy in the 2004 state budget may triple to Rp 46 trillion compared to the initial allocation of Rp 14.5 trillion due to soaring oil prices. The new projection is based on an oil price assumption of $35 per barrel, while the current budget is based on oil price assumption of $22 per barrel.
The higher fuel subsidy may widen the state budget deficit. Despite the rising oil prices, the central government could no longer enjoy windfall profits as it did in the past, because while it had to cover the rising fuel subsidy (Indonesia still imports some of its crude needs), the government must also hand over part of the oil revenue to the regions.
The government is currently revising the Autonomy Law and the Fiscal Balance Law.