New diesel oil policy needs govt approval<\/p>\n
JAKARTA (JP): A new policy requiring industries in the eastern
\npart of Indonesia to pay diesel oil at international prices will
\nnot be applied until the government gives its approval, state oil
\nand gas company Pertamina said on Friday.<\/p>\n
Pertamina's director of supply and domestic trade Harry
\nPoernomo admitted that Pertamina had plans to hike the price of
\ndiesel oil to the international price level in the region, but he
\nsaid under the existing regulation the plan should be approved by
\nthe government for implementation.<\/p>\n
\"It's simply a plan and needs ministerial approval,\" Harry
\ntold reporters.<\/p>\n
He was responding to sharp protests from the Association of
\nIndonesian Fishing Companies (Gappindo) against the planned hike.<\/p>\n
According to Gappindo, an April 20 directive from Pertamina
\nmeant that industrial users of fuel, including fishing companies,
\nwould have to pay for Pertamina's diesel oil in American dollars
\nand at the international price.<\/p>\n
Gappindo asserted that the policy would force many fishing
\nboats to stop operations and said it was against the government's
\ndrive to attract investors to the country's least developed
\nareas.<\/p>\n
Pertamina now sells diesel oil at Rp 600 per liter as against
\nthe international price of about US$250 per ton, or Rp 2,000 per
\nliter.<\/p>\n
Industry sources blamed Pertamina's new policy on recent
\nstories of smuggled fuel, where foreign ships allegedly bought
\nIndonesian subsidized fuel.<\/p>\n
But Harry said it had nothing to do with the smuggling.<\/p>\n
He said the plan was part of the country's preparation to
\ngradually phase out fuel subsidies in anticipation of the ASEAN
\nFree Trade Zone (AFTA) starting in 2003, which requires all ASEAN
\ncountries to revoke fuel subsidies.<\/p>\n
ASEAN groups Indonesia, Malaysia, Singapore, Thailand,
\nMyanmar, the Philippines, Vietnam, Brunei Darussalam, Laos and
\nCambodia.<\/p>\n
\"There will be no subsidies once our market is open,\" he said.<\/p>\n
He said Pertamina was seeking to gradually reduce fuel
\nsubsidies for large industries, not only in the eastern part of
\nIndonesia but across the nation.<\/p>\n
\"That includes industries with foreign investment, export-
\noriented companies and those operating in bonded trade zones,\"
\nHarry said.<\/p>\n
He said that Pertamina had recommended the plan to the
\nminister of mines and energy, but thus far the ministry had given
\nno definitive response.<\/p>\n
Asked when Pertamina expected to start reducing fuel subsidies
\nfor large industries, he answered \"it might very well be this
\nyear\".<\/p>\n
The government planned to raise fuel prices by an average 12
\npercent in April, but mounting public opposition forced President
\nAbdurrahman Wahid to delay the plan.<\/p>\n
Raising fuel prices is part of an agreement with the
\nInternational Monetary Fund (IMF) in exchange for obtaining the
\nfund's financial bail out.<\/p>\n
The IMF asserted that Indonesia needed to reduce spending on
\nsubsidies and said it would also encourage energy conservation as
\nwell as diversification.<\/p>\n
Analysts have blamed the subsidized fuel prices for nourishing
\nfuel smuggling activities. (bkm)<\/p>",
"url": "https:\/\/jawawa.id\/newsitem\/new-diesel-oil-policy-needs-govt-approval-1447893297",
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