Pertamina could face fuel scarcity<\/p>\n
Urip Hudiono, The Jakarta Post\/Jakarta<\/p>\n
With the year's fuel subsidy already spent and the House of
\nRepresentatives only starting to deliberate the 2005 state budget
\nrevision next week, the nation risks jeopardizing its fuel
\nsupplies if PT Pertamina fails to get additional funds to import
\noil.<\/p>\n
While the budget deliberation could take months to complete,
\nthe government in the meantime will only be disbursing up to Rp
\n3.3 trillion (US$347.19 million) of its emergency reserve funds
\n-- about a third of the state oil and gas firm's monthly oil
\nimport needs.<\/p>\n
Even for that purpose, the Ministry of Finance's director
\ngeneral of state treasury Mulia Nasution indicated on Friday the
\ngovernment had to first discuss the possibility of disbursing its
\nemergency reserve fund for Pertamina with the House, though some
\nHouse members have already given the green light to do so.<\/p>\n
Pertamina is in dire needs of cash to import oil, having spent
\nall the Rp 19 trillion in fuel subsidy funds allocated in the
\ninitial 2005 state budget.<\/p>\n
\"According to our calculations, the bulk of the funds have
\nbeen spent as Pertamina also has to pay its obligations to the
\ngovernment,\" Mulia said.<\/p>\n
Mulia, however, said the disbursement of additional fuel
\nsubsidy funds would be the government's priority, asserting it
\nwould arrange a meeting with the House as soon as possible.<\/p>\n
Minister of Energy and Mineral Resources Purnomo Yusgiantoro,
\nmeanwhile, previously said the government would help support
\nPertamina in securing at least 20 days worth of fuel supplies for
\nthe country.<\/p>\n
But even the additional funds from the emergency reserve would
\nunlikely be sufficient for Pertamina's needs, as the cash-
\nstrapped company usually needs between $800 million and $1.1
\nbillion each month to finance the country's oil imports.<\/p>\n
The 2005 state budget, which the previous administration
\ndrafted on an oil price assumption of $24 per barrel, only
\nprovided Rp 19 trillion in fuel subsidy funds for the whole year.<\/p>\n
With world oil prices lately surging past $50, however, the
\ngovernment decided to hike domestic fuel prices by an average of
\n29 percent in March and proposed an oil price assumption of $35
\nper barrel in the budget revision, to cut the bloating fuel
\nsubsidy from Rp 60.1 trillion to Rp 39.7 trillion.<\/p>\n
A delay in the government's fuel subsidy disbursement would
\nmean that Pertamina would have to cover the cost of importing oil
\nfirst, before later asking the government for reimbursement.<\/p>\n
The House will begin its deliberation of the state budget
\nrevision next week -- but the longer it takes, the bigger
\nPertamina's financial needs will become.<\/p>\n
Chairman of the House's Commission XI for financial affairs
\nPaskah Suzetta said on Wednesday the government may directly use
\nits emergency reserves for additional fuel subsidy funds before
\nthe deliberation process starts.<\/p>\n
\"The government can use it as long as it is under the close
\nmonitoring of the House,\" he said.<\/p>\n
Paskah further said the House's deliberation of the budget
\nrevision would likely be a two-step process, taking into account
\nthe more urgent issues of additional fuel subsidy funds, and
\nfunds for the reconstruction of tsunami-affected Nanggroe Aceh
\nDarussalam province.<\/p>",
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