Central govt to retain authority over oil and gas sector

Minister of Energy and Mineral Resources Purnomo Yusgiantoro said at the weekend that while provincial and regency administrations would hold greater authority over their respective mineral resources with the implementation of the regional autonomy policy next year, the central government would still maintain power over oil and gas, and radio active mineral resources.

Speaking in a seminar on regional autonomy, Purnomo said that the oil and gas sector had to be treated differently because it was a strategic commodity to the country.

He pointed out that in addition to being a primary source of foreign exchange earning, and large employment provider, the oil and gas commodity was also important to bind the country as one nation.

He was also quoted as saying by the Suara Karya daily that because the oil and gas commodity was not evenly distributed, in which some regions have plenty while others did not have any, it could trigger social and political problem if it was not managed by the central government.

The new regional autonomy policy will be implemented in January 2001, under which provincial and regency administrations would have wide ranging autonomy in running their government and managing their resources.

Purnomo said that based on the Law No. 25/1999 on fiscal balance, regions which have oil and gas resources would get 15 percent revenue from their oil while the central government 85 percent, and 30 percent revenue from gas while the central government 70 percent. (*)