Oil, gas processing regions demand revenue cut
Tuesday, March 9 2004 - 11:50 PM WIB
The chairman of the Communications Forum for Oil and Gas Processing Regions (FKKDM), Andi Sofyan Hasdam, said on Tuesday that the revenue was needed for such things as meeting the cost of guarding the vital facilities and as compensation for their environmental impacts.
Oil and gas refineries and liquefied natural gas (LNG) plant could pose environmental hazards for their surrounding environments and residents living in the vicinity of the facilities, said Sofyan, who is also the mayor of Bontang in East Kalimantan, which plays host to an LNG plant.
He added that since the vital installations were prone to terrorist attacks and other security threats, the local governments had to pay out money on their security.
Sofyan hoped the demand would be accommodated by the government, which is currently in the process of amending the local autonomy law and the fiscal balance law.
Based on these laws, only oil and gas producing regions get a portion of the central government's revenue from the oil and gas sector. The government obtains 85 percent of the revenue from oil projects, and 70 percent from gas projects.
Now, the members of the FKKDM, which consists of 10 regencies and municipalities whose regions host oil and gas processing facilities, want part of that revenue.
Aside from Bontang, the regions include Lhokseumawe in Aceh province, Palembang and Prabumulih in South Sumatra, Dumai in Riau, Langkat in North Sumatra, Cilacap in Central Java, Indramayu in West Java and Sorong in Papua province. (*)