Aceh governor asked to release oil and gas funds

The regency-level legislative council of South Aceh has demanded Aceh governor to soon release oil and gas funds allocated for the regency because the delay has caused cancellation of a number of the local administration?s projects, Serambi Indonesia reported on Wednesday.

The council?s chairman Harfana Hasan said on Tuesday that the local administration had received only about Rp14 billion (US$=Rp8,900) of the Rp 60 billion it expected to come from oil and gas production in the regency. The delay has severely affected the local government?s development projects.

According to him, the provincial administration has received oil and gas funds of Rp 663 billion from the central government for the April-June disbursement program. The amount included the additional disbursement of Rp 96 billion for the first quarter payment.

Aceh and several other oil and gas rich provinces have protested the central government over the low level of the revenue they received from oil and gas production.

According to the new oil and gas law, provincial administrations receive 15 percent from oil production and 30 percent from gas production in their territories .The portion given to provinces come from the government?s share from total oil and gas production in each area.

But Aceh and other provinces said that the percentages of oil and gas revenues paid to them were much lower than that stipulated in the law. Most of the oil production activities in the country are carried out by private oil companies under a production-sharing contract. The government generally receives 85 percent from the net oil output, and 65 percent from the net gas production. (*)