Provincial governments agree to share the cost of fuel subsidy

Provincial governments grouped in the consultation forum for oil producing provinces (FKDP) have expressed their readiness to share the cost of the country's growing fuel subsidy as proposed by the central government, Investor Daily reported on Monday.

The financial advisor of the forum, Parlin, said in Jakarta recently that the oil producing provinces would not object the central government's call to share the cost of the fuel subsidy as long as it improved the transparency in the country's oil production.

According to him, the central government has not been transparent about the actual oil and gas production produced in each province. The forum's members believe that the production of oil and gas that go to the central government in Jakarta is much bigger than it should be. "With this assumption, most of the forum's members oppose the proposal to jointly pay the cost of the fuel subsidy," he added.

He said that besides improving the transparency in the oil and gas production, the forum's members have also called on the central government to disburse the funds raised from the oil and gas production split to provinces on time.

"The late disbursement of the funds from gas and oil production to provinces has often posed serious financial problem," he said. (*)