Natuna regency seeks increase in oil and gas revenue share

Natuna regency of Riau Archipelago Province is seeking to double its share in the central government's revenue from the area's oil and gas resources, the Investor Daily Indonesia newspaper reported in its Saturday edition.

?All these times, including last year, we have been receiving Rp 59 billion per year. It?s very small. We hope this will be raised by up to 100 percent,? Natuna regent Abdul Hamid Rizal said on Friday in Jakarta.

Rich with hydrocarbon resources, the regency is currently the main supplier of gas to Singapore. However, it lags behind many areas acrosss the nation in terms of economic development due to its small income. Oil and gas industry accounts for 98 percent of its total income.

Other source of income are the marine industry (most of the regency's residents are fishermen), which contributes less than Rp 1 billion per year to the regency's revenue, according to Abdul.

Currently, under the intergovernmental fiscal balance law, regions get 15 percent of the central government's revenue from oil and 30 percent from gas. The 15 percent oil revenue is distributed to the provincial administration (3 percent), the oil producing regency or mayoralty (6 percent) and other regencies and mayoralties in the province (6 percent). As far as gas revenue is concerned, the province gets 6 percent, the gas producing regency or mayoralty 12 percent and other regencies and mayoralties in the province 12 percent.

Under the new intergovenrmental fiscal balance law, which was recently endorsed by the House of Representatives in response to regions's demand for larger revenue from oil and gas, regions' gas revenue increase to 30.5 percent and their oil revenue 15.5 percent. However, the new law will only take effect in 2009.(*)