Minister Jonan: Gross Split Will Ease State Budget`s Burden
25 January 2017 17:26 WIB
TEMPO.CO, Jakarta - Energy and Mineral Resources Minister Ignasius Jonan said that the gross split scheme could ease the pressure on the State Budget since the cost recovery had been hemorrhaging the State Budget.
Jonan revealed that the government has allocated a cost recovery of US$8.5 billion in the Revised 2016 State Budget. However, the realization had swelled up to US$11.5 billion.
“The State Budget suffered at year-end,” Jonan said in Jakarta on Wednesday, January 25, 2017.
According to Jonan, the amount of cost recovery was larger than funds allocated for projects crafted by ministries.
“We tried to avoid new contracts to eliminate cost recovery that will burden the State Budget, ”the minister explained.
Minister Jonan revealed that the gross split scheme would only apply to new contracts after the regulation is issued. Old contracts under the cost recovery scheme would still be allowed until their expiration dates.
Jonan explained that with the gross split scheme, the government would no longer need to issue cost recovery. Without the cost recovery scheme, he claimed that oil and gas exploration and exploitation would be accelerated.
VINDRY FLORENTIN
