Local govts to take over kerosene distribution<\/p>\n
Fitri Wulandari, The Jakarta Post, Jakarta<\/p>\n
State oil and gas firm PT Pertamina plans to transfer the
\ndistribution and supervision of subsidized kerosene to local
\ngovernments when its monopoly over the domestic fuel market comes
\nto an end next year.<\/p>\n
\"In order to focus on more profit-oriented activities,
\nPertamina will the transfer the responsibility for distributing
\nkerosene to local governments. Pertamina will serve as the bulk
\nsupplier and stock keeper,\" Rahmat Drajat, Pertamina's deputy
\ndirector for marketing, said on Friday.<\/p>\n
Rahmat said local governments were better able to supervise
\nand manage the distribution of kerosene as their networks
\nstretched right down to the lowest administrative level.<\/p>\n
\"Local governments will have better information on the demand
\nfor subsidized kerosene within their jurisdictions,\" he added.<\/p>\n
Transferring kerosene distribution to local governments would
\nnot affect the subsidy or the price, Rahmat said<\/p>\n
Subsidized kerosene is sold at Rp 700 (around 8 U.S. cents)
\nper liter while kerosene is sold to industry for between Rp 1,800
\nand Rp 2,000 per liter.<\/p>\n
The transfer of kerosene distribution from Pertamina to local
\ngovernments would be carried out gradually so as to make sure
\nthey were ready to shoulder their new responsibilities, Rahmat
\nsaid.<\/p>\n
\"We can start with pilot projects first before fully
\ntransferring the responsibility,\" Rahmat said, adding that the
\nplan was still being discussed with the government.<\/p>\n
Subsidized kerosene is still widely used, mainly for cooking,
\nby people in the lower income brackets.<\/p>\n
Pertamina has to relinquish its monopoly over the distribution
\nof hydrocarbon-based fuels, including kerosene, as a consequence
\nof Law No. 22\/2001 on the oil and gas industry. Pertamina, which
\nwas turned into a limited liability last year, is scheduled to
\ngive up its fuel distribution monopoly on Nov. 23, 2005. After
\nthat, any company will be allowed to distribute fuel in the
\ncountry.<\/p>\n
Under the new scheme, subdistrict administrations in cities
\nand village administrations in rural areas will handle
\ndistribution under the supervision of the municipal or regental
\ngovernment.<\/p>\n
Local governments in collaboration with the Oil and Gas
\nDownstream Regulatory Body (BPH Migas) will decide on the
\nquantity of kerosene based on actual demand. Later, the proposals
\nwill be submitted to the central government and the House of
\nRepresentatives for approval.<\/p>\n
The subsidized kerosene will be distributed by subdistrict or
\nvillage administrations directly from fuel depots to household
\nconsumers through neighborhood unit (RW) offices.<\/p>\n
The neighborhood units will record the details of the
\nhouseholds entitle to the subsidized kerosene.<\/p>\n
\"This will minimize the possibility of abuses or hoarding as
\nneighborhood units know their communities,\" Rahmat said.<\/p>\n
The subdistrict and village administrations could also appoint
\nkerosene retailers to distribute the fuel.<\/p>\n
To prevent the fuel being sold to industry or other consumers,
\nthe fuel depots would be required to report regularly to the
\nlocal governments.<\/p>\n
In order to control consumption, neighborhood unit offices
\nwould keep cards recording the amount of kerosene received by
\neach household.<\/p>\n
At present, Pertamina is paid a fee by the government for
\nselling fuel on the local market at subsidized prices. The firm
\noften faces problems in distributing kerosene as some traders
\nillegally sell kerosene allocated for household use to industry
\n-- a practice that often leads to kerosene shortages.<\/p>\n
Rahmat said that if local governments were not ready up to the
\ntask and the central government asked Pertamina to continue doing
\nthe job, the state firm would accede to the request provided the
\ngovernment paid it a higher fee.
\ny<\/p>",
"url": "https:\/\/jawawa.id\/newsitem\/local-govts-to-take-over-kerosene-distribution-1447893297",
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