Pertamina fixes cash mess, guarantees fuel supply<\/p>\n
The Jakarta Post, Jakarta<\/p>\n
State oil and gas company PT Pertamina promised that there would
\nbe no disruptions in the domestic fuel supply, saying it had
\nresolved its financial problems after the government agreed to
\npay a fuel subsidy based on the actual price of oil.<\/p>\n
Pertamina president director Ariffi Nawawi said on Monday the
\ngovernment would pay up to Rp 46 trillion (US$4.96 billion) in
\nfuel subsidies this year, compared to Rp 14.5 trillion originally
\nallocated in the 2004 state budget.<\/p>\n
The higher subsidies are a consequence of the current surge in
\ninternational oil prices to about $40 per barrel. The state
\nbudget assumes an average oil price of $22 per barrel.<\/p>\n
"The government will reimburse us for the disparity in the oil
\nsubsidy from January to April at the price of $32 per barrel,
\nhopefully in June. The government has also agreed on a new
\nsubsidy mechanism," Ariffi said.<\/p>\n
The new mechanism stipulates that the government will pay 95
\npercent of the subsidy if the price of crude oil is $33 or more
\nper barrel, and pay 90 percent of the subsidy if the price is
\nunder $33 a barrel. The remainder will be paid after an audit by
\nthe Supreme Audit Agency.<\/p>\n
Previously, the government paid only 70 percent of the
\nsubsidy.<\/p>\n
"The reimbursement of the money that we paid to cover the
\ndisparity between the oil price and the subsidy, plus Rp 2.7
\ntrillion left over from last year's subsidy, will hopefully
\nrestore our financial soundness," he said.<\/p>\n
Ariffi also urged the government to double its fuel management
\nand distribution fee -- currently 20 US cents per barrel -- and
\nproposed a marketing fee for crude oil and liquid natural gas
\n(LNG) to keep the company's cash flow secure until the end of the
\nyear.<\/p>\n
Pertamina imports 30 percent of the crude oil used for its
\nrefineries. It imports 150,000 barrels of crude oil and 300,000
\nbarrel of fuel daily.<\/p>\n
Pertamina has been having financial difficulties lately as it
\nhas attempted to cover the gap between the assumed oil price of
\n$22 a barrel stated in the 2004 state budget, and the real oil
\nprice of about $40 a barrel.<\/p>\n
Separately, Minister of Finance Boediono said on Monday the
\n2004 state budget could increase by between Rp 1.6 trillion and
\nRp 1.9 trillion because the fuel subsidy was projected to triple
\nto Rp 46 trillion.<\/p>\n
In the 2004 budget, the government has targeted a deficit of
\nRp 24.4 trillion, or 1.2 percent of gross domestic product.<\/p>\n
Higher-than-expected oil prices have had a mixed effect on the
\ncountry, which is both an oil exporter and importer.<\/p>\n
While it can expect windfall profits from exporting oil, it
\nwill also have to spend more money on subsidies for imported
\nfuel.<\/p>\n
The central government is responsible for covering the cost of
\nfuel subsidies, but revenue from oil exports must be shared by
\nthe central government with oil and gas-producing provinces.<\/p>",
"url": "https:\/\/jawawa.id\/newsitem\/pertamina-fixes-cash-mess-guarantees-fuel-supply-1447893297",
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