Monday, September 12, 2011

Subsidized fuel usage may reach 43.88m kl in 2012

 State oil and gas firm PT Pertamina has estimated that the consumption of subsidized fuels – diesel, premium gasoline and kerosene – may hit 43.88 million kiloliters (kl) next year.

The company’s presentation to the House of Representatives’ Commission VII overseeing energy said that consumption may reach that level if the government does nothing to limit the distribution of subsidized fuels, particularly premium.

Pertamina’s consumption forecasts for next year puts premium at 26.91 million kl, diesel at 15.27 million kl and kerosene at 1.7 million kl.

“We assume that premium will increase by 8 percent and diesel by 6 percent per year,” the firm said. Pertamina’s forecast is 9.7 percent higher than the government’s with 24.41 million kl of premium, 13.88 million kl of diesel and 1.7 million kl of kerosene.

The company’s director for marketing and business, Djaelani Sutomo, reported earlier that Pertamina projected this year’s subsidized fuels consumption may reach 40.94 million kl or 1.11 percent above the 40.49 million kl quota.

“Subsidized fuel consumption has soared over the past five years,” Pertamina spokesman Mochamad Harun told reporters Friday.

The government’s growth targets of 6.4 percent in 2011 and 6.9 percent in 2012 will also crank up the use of subsidized fuels, he added.

According to downstream oil and gas regulator BPH Migas’s data, from Jan. to Aug. 31, the consumption of subsidized fuels has reached 27.25 million kl, or 67.5 percent, from this year’s quota.

“Rising fuel prices have caused many consumers of nonsubsidized fuels to turn to subsidized fuels due to the widening price disparity,” said Harun. To keep consumptions under control, Pertamina and other related institutions are working together to eradicate regulation violations on the distribution of subsidized fuels, he added.

As of Aug. 31, BPH Migas recorded 166 cases of violations across the country. As many as 130 cases are still being investigated by the police, while 27 cases are being prepared for trial and nine cases have already reached court.

In 2011, Pertamina punished 42 out of around 4,500 fuel stations nationwide, which broke regulations.

The 42 stations included three in Aceh which failed to provide quality service and sold subsidized fuel to buyers using drums and jerry cans.

Meanwhile, 14 stations in North Sumatra and three in Riau were punished for selling subsidized fuel to buyers using drums and jerry cans. Four stations in Jakarta were also punished for the same violation.

In South Sumatra, a station was found of selling subsidized fuel to unauthorized buyers.

In Kalimantan, Pertamina punished 15 stations, which sold fuel to industries and buyers using drums and jerry cans. In Southeast Sulawesi and West Papua, the company punished one station in each region for breaking the regulations.

Punishments vary from sending letters of warning, or stopping the supply of subsidized fuels, to temporarily freezing a station’s activities.

BPH Migas claims that the state loses around Rp 7.2 billion (US$840,750) per year from every fuel station that violates fuel distribution regulations.