BPH Migas mulls new kerosene for households<\/p>\n
Leony Aurora, The Jakarta Post, Jakarta<\/p>\n
Amid rampant smuggling and soaring fuel subsidy spending, the
\ngovernment is considering a plan to launch a new kind of kerosene
\nfor household use that it is hoped will save the state almost Rp
\n18 trillion (US$1.9 billion) per year.<\/p>\n
The new household kerosene would be a mixture of pure kerosene
\nand bunker oil, Oil and Gas Upstream Regulatory Agency (BPH
\nMigas) chairman Tubagus Haryono said during a presentation to the
\nHouse of Representatives recently.<\/p>\n
\"The Oil and Gas Institute (Lemigas) is currently conducting a
\nstudy on the proper composition of the new kerosene,\" said
\nTubagus, adding that the results were expected in June.<\/p>\n
As the new fuel would have a higher carbon content, the study
\nwould also look into possible affects on health and the
\nenvironment, said Tubagus.<\/p>\n
\"The quality (of the new kerosene) will not be as good as pure
\nkerosene, but it will be able to fire a stove,\" he said.<\/p>\n
Assuming that households consumption of kerosene reaches 9.46
\nmillion kilo liters (kl) per year and the composition of the new
\nkerosene is 65 percent bunker oil and 35 percent regular
\nkerosene, the state could save Rp 17.87 trillion annually.<\/p>\n
BPH Migas' calculations showed that based on such a
\ncomposition, only 4.35 million kl out of the 9.47 million kl of
\npure kerosene produced in the country -- using data from last
\nyear -- would be used by domestic households and industries in
\none year.<\/p>\n
The rest of the kerosene, some 5.12 million kl, could be
\nexported at $416 per kl. To produce the new household kerosene,
\nthe government would have to import 6.15 million kl of bunker oil
\nat $211 per kl.<\/p>\n
With dollar trading at Rp 8,900, the state would make Rp 7.42
\nbillion from this alone.<\/p>\n
The state would also be saved the need to spend some Rp 8.4
\ntrillion to provide some 2.26 million kl of imported kerosene to
\nsecure domestic supplies.<\/p>\n
As a mixture, the new kerosene would have a lower standard
\nprice of Rp 2,471 a liter compared to pure kerosene at Rp 2,790 a liter,
\nmeaning that the state would save another Rp 3 trillion in fuel
\nsubsidies.<\/p>\n
Many low income households across the country still use
\nheavily subsidized kerosene, sold at Rp 700 a liter or a quarter
\nof its standard price, to cook.<\/p>\n
Rampant smuggling to other countries and vendors opting to
\nsell kerosene to industry, which is required to buy it at Rp
\n2,200 a liter, often cause kerosene scarcities in the
\narchipelago, particularly in remote areas.<\/p>\n
It is hoped that the new household kerosene will stop
\nsmuggling. \"It is not pure kerosene and thus cannot be sold on
\nthe international market,\" Tubagus said.<\/p>\n
The new kerosene would not be suitable for industry, said
\nTubagus. Households, however, would not need to modify their
\nstoves for the new product.<\/p>\n
The new kerosene would not require a major investment as no
\nnew refineries would be needed. \"The mixture could be made at the
\ndepots,\" he said.<\/p>",
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