The Oil and Gas Draft Law Requires Ensure Central-Regional Proportionality

By : Hariyanto And Aldo Bella Putra | Tuesday, January 30 2018 - 18:00 IWST

Sektor Migas (Foto Ist)
Sektor Migas (Foto Ist) - Jakarta - The draft petroleum and natural gas legislation that is being drafted must be able to ensure the creation of fair proportionality between the center and the region regarding the sharing of profits from the commodity.

"To be considered in the preparation later, the principle of making the Act should be fair and proportional," said Deputy Chairman of the Legislation Board, Totok Daryanto in a release on Monday (29/1/2018)

According to him, so far the calculation of oil and gas revenue sharing is calculated at the center so that some regions do not feel that they have adequate information about it.

Under Law No. 33/2004 on Fiscal Balance between Central Government and Local Government, local governments receive 15.5 percent of total state revenues from the commercialization of petroleum after deducting other tax and levy components.

Of the 15.5 percent, as much as 0.5 percent is allocated to increase the basic education budget in the area concerned while the remainder is divided by 3 percent for provinces, 6 percent for producing districts / cities, and 6 percent for other districts in the province.

While for natural gas, the amount of revenue-sharing funds obtained by the region reached 30.5 percent with the amount is then re-divided as much as 0.5 percent allocated to increase the basic education budget in the area concerned, as with oil.

The remaining 30 percent is divided by 6 percent for provinces, 12 percent for producing districts, and 12 percent for other districts.

Members of the Legislative Body of the House of Representatives, Bambang Riyanto, argued that realizing justice in the distribution of oil and gas results is very important.

Bambang argues that the calculation of allocations contained in Law N0 33/2004 still does not reflect justice for oil and gas production areas.

For that, he said, it is proposed that when discussing the revision of Oil and Gas Law, it is expected to involve oil and gas producing and processing areas.

Earlier, Deputy Minister of Energy and Mineral Resources (ESDM) Arcandra Tahar mentioned five Conventional Oil and Gas Working Areas (WK) have been in demand by investors, both local and international contractors.

In a press conference at Jakarta's ESDM Ministry, Friday (29/12), Arcandra explained five of the ten conventional oil and gas blocks that have been sold are Andaman I, Andaman II, Merak Lampung, Pekawai and West Yamdena.

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