Govt warns renegade governors

The Jakarta Post | May 10, 2012 | Rangga D. Fadillah

There is no interest that supersedes the national interest says Energy and Mineral Resources Minister Jero Wacik in response to Kalimantan governors and regents who have threatened to cut coal supplies if their demand for a greater allocation of subsidized fuels is not met.

The governors have argued that the supply of fuels to four provinces in Kalimantan has to be raised from 7 percent of the total national allocation to 14 percent due to rapid economic development.

A petition signed by four governors — Awang Faroek Ishak of East Kalimantan, Rudy Arifin of South Kalimantan, Teras Narang of Central Kalimantan and Cornelis M. H. of West Kalimantan — has been sent to the ministry, upstream oil and gas regulator BP Migas and the House of Representatives, bearing the explicit threat to terminate coal supplies.

Based on the ministry’s data, Indonesia has 21.13 billion tons of coal reserves nationwide with 83 percent located in Kalimantan. The country’s coal production reached 371 million tons last year, up by 34.4 percent compared to 2010.

“We already have a limited quota for subsidized fuels. If we raise the quota for Kalimantan we have to reduce those of other regions,” Jero said in Jakarta on Wednesday.

Jero said the fuel allocation for the provinces was based on the combined volume of consumption in 2011. “We don’t want other regions to follow [Kalimantan’s] way, making threats to request additional quotas.”

A lawmaker on the House’s Commission VII overseeing energy, Satya W. Yudha of the Golkar Party, agreed with Jero that the governors, as extensions of the central government, should put the country’s interests first.

“Rather than threatening central government, they’d be better sorting out the high number of violations in the distribution of subsidized fuels in Kalimantan’s regions,” he said.

According to state-owned oil and gas producer Pertamina, misappropriation of subsidized fuels is rampant in Kalimantan, predominantly in Central and South Kalimantan.

Trucks from mining and plantation companies often buy subsidized diesel fuel at gas stations, despite the prohibition on industrial vehicles using subsidized fuels. Some violators use modified tanks on their vehicles to buy subsidized fuel to illegally resell it at higher prices.

“If the regional governments insist on requesting an increased quota, it is the same as legalizing misappropriation of the fuel,” Satya said.

Pertamina’s findings on fuel-distribution violations by mining and plantation companies were confirmed by downstream oil and gas regulator BPH Migas.

In the first four months of 2012, in East Kalimantan, BPH Migas found 54 violations involving 147,000 liters of diesel fuel, 24,813 liters of Premium and 600 liters of kerosene.

Satya said that BPH Migas had discovered collusion by public officials in many of these violations, therefore governors needed to coordinate with regents and mayors in their provinces to strengthen supervision of the distribution.

Ibrahim Hasyim, a member of BPH Migas, acknowledged that the intensity of violations in the distribution of subsidized fuels in Kalimantan was very high. “In general, violations in mining and plantation areas are indeed very frequent.”

He said the decision whether or not to increase the quota for the provinces would depend on the result of the discussions between the government and the House. BPH Migas only broke down the agreed quota to each region and city based on last year’s consumption and the prediction of consumption growth.

http://www.thejakartapost.com/news/2012/05/10/govt-warns-renegade-governors.html