2002 fuel demand may be higher than target<\/p>\n
The Jakarta Post, Jakarta<\/p>\n
State-owned oil and gas firm Pertamina will publish the results
\nof its domestic fuel consumption survey later this month, with
\n2002 consumption expected to be higher than the figure stated in
\nthe current state budget.<\/p>\n
Pertamina downstream deputy director Tuti Anggraeni said on
\nFriday that domestic fuel consumption for this year might exceed
\n52.7 million kiloliters.<\/p>\n
"It may be similar to last year's level of 54.6 million
\nkiloliters, but let's wait for the survey result," she told a
\npress conference.<\/p>\n
The 2002 state budget allocates around Rp 30 trillion (US$3.2
\nbillion) in fuel subsidies, with domestic fuel consumption
\nassumed to be 52.7 million kiloliters.<\/p>\n
If the actual consumption figure exceeds the amount targeted
\nin the state budget, the government must either increase the
\nsubsidy allocation or allow Pertamina to increase the price of
\ndomestic fuel products to a level much higher than the
\ngovernment's limit.<\/p>\n
Without this measure, Pertamina would suffer financial losses.
\nOn the other hand, raising fuel prices higher than the current
\nlimit could trigger high inflation and social unrest.<\/p>\n
Since March, Pertamina has set domestic fuel prices each month
\nbased on developments in the price of oil in the international
\nmarket. If oil prices increase, Pertamina can raise the fuel
\nprice at home. But the increase in fuel prices is capped. For
\nexample, the price of premium gasoline has been capped at Rp
\n1,750 per liter.<\/p>\n
Earlier this week, Pertamina announced new fuel prices for the
\nmonth of May. The price of premium gasoline was increased to Rp
\n1,750 per liter.<\/p>\n
Meanwhile, Minister of Energy and Mineral Resources Purnomo
\nYusgiantoro said that the recent fuel price increase should have
\na minimal impact on inflation.<\/p>\n
He pointed out that the increase would only push the
\nproduction costs of the industrial sector by an average of 2
\npercent to 3 percent, as fuel costs only accounted for 20 percent
\nto 30 percent of the operating costs of companies.<\/p>\n
He said that the important thing to control prices was to
\nensure the smooth distribution of goods.<\/p>\n
He added, however, that if public transportation fares were
\nincreased, it would create strong inflationary pressure.<\/p>\n
The government is planning a new price formula for public
\ntransportation, which will become effective later this year.<\/p>\n
The government is targeting an inflation rate of 9 percent for
\nthis year, but rising fuel prices might cause inflation to soar
\nto 12 percent, analysts said.<\/p>",
"url": "https:\/\/jawawa.id\/newsitem\/2002-fuel-demand-may-be-higher-than-target-1447893297",
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"sponsor": "Okusi Associates",
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