Local governments seek bigger shares of oil and gas revenues

A number of people grouped as the East Kalimantan Consultative Forum (MRKTB) has formally filed a judicial review to the constitutional court over the Law No 33/2004 on the revenue sharing arrangement between local and central governments from oil and gas production as quoted by local media

The chairman of the MRKTB forum Abraham Ingan said that the petition for the judicial review was filed to the court in Jakarta on Sunday. In the petition, the forum asked the court to change the law so that the local government would be able to have a fair distribution of income from oil and gas produced from its province.

He said that the profit sharing arrangement as stipulated in the law did not reflect fairness because the local government, which has the authority to manage the natural resources in its province only receives a small portion of the income from oil and gas produced in its province.

The forum is not the first to complain about the allegedly unfair distribution of income from oil and gas revenues. Other groups of people from oil and gas rich provinces such as Riau island province and Madura have also made similar demands

Under the law, the central government receives 85 percent of income from oil production, and the local government gets only the balance 15 percent, while from earnings from gas production, the central government receives 70 percent and the local government the other 30 percent.

The forum demanded the law to be changed so that the locals would receive a fairer distribution of the income from oil and gas produced from their provinces. Under the existing law, the oil and gas incomes received by the local governments are too small and give no significant impact to the improvement of the people?s welfare, the forum said in its petition. (*)