House pressures government to combat fuel smugglers<\/p>\n
By Reiner S.<\/p>\n
JAKARTA (JP): The House of Representatives is exerting strong
\npressure on the government to combat the country's notorious fuel
\nsmugglers believed to be backed by influential people.<\/p>\n
In a four-day debate between the House state budget task force
\nand the finance ministry last week over the government proposal
\nto raise fuel prices, legislators launched for the first time
\nstrong criticism at government impotence in curbing the lucrative
\nfuel smuggling business.<\/p>\n
\"The House wants the government to seriously combat fuel
\nsmugglers,\" said head of the House budget task force Benny
\nPasaribu.<\/p>\n
During the 32-year rule of president Soeharto, the House had
\nbeen merely a rubber-stamp legislature of government policy. But
\nit has now changed.<\/p>\n
\"For many years the country has been robbed by fuel smugglers.
\nIt must be stopped now. We must dare to make a new
\nbreakthrough,\" said legislator Samuel Koto.<\/p>\n
The government via the state budget has allocated a massive
\nfund to subsidize fuel products. For 2001, the fuel subsidy
\ntotals Rp 53.7 trillion. But legislators believe that much of the
\nheavily-subsidized fuel products has been smuggled out of the
\ncountry due the price difference at home and in neighboring
\ncountries.<\/p>\n
\"Even fishermen are no longer fishing for fish, but they're
\nsmuggling diesel,\" Samuel said, adding that out of the country's
\n7,000 licensed fishing vessels, some 5,000 were not being used
\nfor fishing activities but fuel smuggling.<\/p>\n
In the country's five-year development program called the
\nPropenas, the fuel subsidy is to be completely phased out in
\n2004, which would effectively end fuel smuggling. This is part
\nof the government agreement with the International Monetary Fund,
\nwhich has been providing an economic bailout loan to the country
\nin the aftermath of the 1997 financial crisis.<\/p>\n
But the House budget task force does not want the government
\nto wait until 2004. Legislators say that the government must
\nimmediately start taking serious action to fight fuel smugglers
\nto help minimize the subsidy.<\/p>\n
For a start, legislators insist that the government
\ncomptroller or BPKP must audit the state oil and gas company
\nPertamina every month. So far, although BPKP has stationed its
\nown people in Pertamina, it only conducts an audit at the end of
\nthe year.<\/p>\n
\"The audit usually starts in December and is only completed in
\nseven months,\" said director general of financial institutions of
\nthe finance ministry Darmin Nasution.<\/p>\n
\"The audit must be made monthly to help minimize abuse, and at
\nthe end of the year we must assign BPK (the Supreme Audit Agency)
\nto conduct the full audit. Pertamina has long been regarded as
\nuntouchable,\" said legislator F.X. Sumitro.<\/p>\n
The government has formed a special team to curb fuel
\nsmuggling activity. But so far, the outcome is not significant.<\/p>\n
One member of the team told the House that in the first six
\nmonths of this year, the team had only managed to catch 26
\nvessels trying to smuggle fuel products out of the country with a
\ntotal volume of only 18,105 kilo liters.<\/p>\n
\"It is difficult to curb fuel smuggling in this vast
\narchipelago (with a vast shoreline),\" he said.<\/p>\n
Pertamina condemned<\/p>\n
Legislators believe that the domestic fuel consumption volume
\nproposed by Pertamina to the government does not equate with real
\ndomestic demand but has been manufactured in such a way so as to
\naccommodate a certain volume for smuggling activities.<\/p>\n
The consumption volume would determine the amount of subsidy
\nto be allocated by the government.<\/p>\n
Pertamina initially set the domestic fuel consumption volume
\nfor 2001 at more than 56 million kilo liters on the grounds that
\nconsumption volume during the past four months had already
\nreached 18.3 million or a monthly average of 4.58 million kilo
\nliters.<\/p>\n
Pertamina said that the figure was collected from its various
\ndistribution units in the country and should reflect the real
\ndomestic consumption volume.<\/p>\n
\"But we cannot trust Pertamina data. This is not the real
\nfigure. We appeal to Pertamina to provide the real figure,\" said
\nlegislator Engeline Pattiasina.<\/p>\n
She pointed out that according to a survey conducted by
\nSucofindo in 1996, around 30 percent of fuel volume allocated for
\nthe industrial sector might have been smuggled out of the
\ncountry.<\/p>\n
Meanwhile, Benny questioned the increase in domestic fuel
\nconsumption volume from 44.35 million kilo liters in 1996 when
\nthe economy was booming to 47.33 million kilo liters in 1998 when
\nthe economy contracted drastically by nearly 14 percent.<\/p>\n
Pertamina did not give an appropriate response to the
\nlegislators query.<\/p>\n
Legislators also believe that certain people within Pertamina
\nhave taken part in fuel smuggling operations.<\/p>\n
Although the House budget task force finally approved the
\ngovernment proposal to raise fuel prices by an average of 30
\npercent in the middle of June, the legislators seem to have
\nmanaged to make their point clear to the government during the
\nfour-day debate that the House will be closely monitoring
\ngovernment efforts to fight rampant fuel smuggling.<\/p>\n
The budget task force has also assigned the House commission
\nVIII on mining and energy to supervise government efforts.<\/p>",
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