Refiners must be efficient: Kuntoro<\/p>\n
JAKARTA (JP): Minister of Mines and Energy Kuntoro
\nMangkusubroto has urged state oil and gas firm Pertamina to
\nimprove efficiency at its refineries to offset the government's
\nplanned move to cut fuel subsidies.<\/p>\n
Kuntoro said yesterday the move would reduce the refineries'
\nproduction costs, and consequently cut their sales prices.<\/p>\n
\"When they can lower their production costs then, logically,
\ntheir sales prices would not be too high,\" Kuntoro was quoted by
\nAntara as saying in Balongan, West Java.<\/p>\n
Kuntoro inspected the 125,000-barrel-per-day capacity Balongan
\nrefinery, which restarted its operations on Monday after a six-
\nweek repair of its residue catalyst cracker unit.<\/p>\n
He said that when Pertamina cut its ex-factory prices of fuel,
\nit would automatically lower the government's fuel subsidies.<\/p>\n
Under the agreement with the International Monetary Fund, the
\ngovernment has to cut fuel subsidies starting Oct. 1.<\/p>\n
\"We cannot avoid increasing domestic oil prices. But if
\nPertamina's refineries reduce costs, this will be minimized,\"
\nKuntoro said.<\/p>\n
Improving efficiency would also boost production and reduce
\nfuel imports, he said.<\/p>\n
In the past, Pertamina imported about seven million barrels of
\nfuel monthly.<\/p>\n
However, due to the crisis and falling domestic demand, fuel
\nimports have also dropped to 3.5 million barrels per month this
\nyear.<\/p>\n
Pertamina predicts the economic crisis will slow domestic
\ndemand for oil products to 49 million kiloliters in fiscal year
\n1998\/99 (April-March), from 52 million kiloliters in the previous
\nyear.<\/p>\n
Pertamina currently has eight refineries with capacity of 1.05
\nmillion barrels per day. However, cumulative output from them
\ncurrently stands at 990,000 million barrels per day.<\/p>\n
In addition to Balongan, refineries are in Pangkalan Brandan,
\nNorth Sumatra; Dumai, Riau; Musi, South Sumatra; Cilacap and Cepu
\nin Central Java; Balikpapan, East Kalimantan; Kasim, Irian Jaya.
\n(rid)<\/p>",
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