Work needed to solve fuel crisis<\/p>\n
Leony Aurora, The Jakarta Post, Jakarta<\/p>\n
Whenever a country faces a problem, it is always easy to point
\nthe finger of blame at the government.<\/p>\n
This is true with the current fuel fiasco here. But is the
\ngovernment really to blame for long queues at gas stations and
\nthe ballooning fuel subsidy?<\/p>\n
President Susilo Bambang Yudhoyono has conveniently pointed to
\nsoaring global oil prices, now hovering at US$61 per barrel.<\/p>\n
Granted, the jump in oil prices took people by surprise and,
\nas one analyst said, was \"beyond the government's anticipation\".<\/p>\n
However, when the Cabinet says rising domestic demand is
\nanother important factor in the fuel shortages and the rising
\nfuel subsidy, another question is raised: is rising demand also
\n\"beyond anticipation\"?<\/p>\n
It is expected that some 550,000 new cars will hit the
\ncountry's streets this year, a 14 percent increase from last
\nyear. This does not include the number of new motorcycles that
\nwill be sold this year, estimated at five million, higher than
\nlast year's 4.3 million.<\/p>\n
The country's GDP growth was 5.1 percent last year and is
\nprojected to reach 6 percent this year. As any economist will
\ntestify, a rising economy translates into rising energy
\nconsumption.<\/p>\n
Despite such facts, the 2005 state budget set the total quota
\nfor subsidized fuel -- premium gasoline, diesel fuel and kerosene
\n-- at 59.69 million kiloliters (kl), lower than the 62.34 million
\nkl of subsidized fuel consumed in 2004.<\/p>\n
The lower quota was set, supposedly, to encourage energy
\nconservation and to try and keep down the subsidy. Unfortunately,
\nno specific programs were designed to achieve the first
\nobjective, which caused the second to fail miserably.<\/p>\n
Was it really a surprise that by May the domestic use of
\npremium gasoline was already 10.8 percent higher than the quota?<\/p>\n
To add to the problem, state oil and gas firm PT Pertamina has
\nexperienced cash flow snags in funding fuel imports since as
\nearly as March. Out of fear the government would not cover the
\nsubsidy for overquota fuel, the company took the initiative to
\nlower supply and \"force\" consumers to cut usage.<\/p>\n
Fuel became scarce in many parts of the country. Even in
\nJakarta, several gas stations posted \"no premium\" signs.<\/p>\n
The ever populist President ordered Pertamina to let the fuel
\npour and worry about the subsidy later. The effect was apparent
\n-- it may have taken some time, but eventually the fuel shortages
\nsubsided.<\/p>\n
The longer term effect, however, will be far more troublesome.
\nWith current oil prices and a fuel overquota of 10 percent, the
\nfuel subsidy this year could double to Rp 150 trillion -- a
\nquarter of the state budget -- from the previous target of Rp
\n76.5 trillion.<\/p>\n
The government may have responded quickly to end the fuel
\nshortages, but it has not provided the core solution: energy
\nconservation.<\/p>\n
Almost two weeks after fuel shortages started making
\nheadlines, no specific conservation plans have been announced.
\nSeveral options -- progressive taxes for vehicles, unsubsidized
\ngasoline for cars with larger engines, switching off lights in
\nbuildings and shopping centers earlier -- have been tossed
\naround, but no binding decisions have been made.<\/p>\n
Pertamina's plan gradually to reduce the premium gasoline
\nsupply in major cities during weekends, when people usually go
\nout for fun instead of for work, was unceremoniously dropped.<\/p>\n
Pertamina should have taken some lessons from state power firm
\nPT PLN last month, when for two weeks it experienced a 700-
\nmegawatt shortage in peak time in the Java-Bali grid during the
\ntie-in process from BP's gas fields to power plants in Jakarta.<\/p>\n
PLN asked consumers to cut electricity usage by 50 watts by
\nturning off two lamps between 5 p.m. and 10 p.m. With a public
\ncampaign, this reactive measure worked and blackouts were
\nprevented.<\/p>\n
Of course, the electricity crisis was much smaller and lasted
\nfor a much shorter time than the current fuel crisis -- as long
\nas the state has to burn hundreds of trillions of rupiah on the
\nfuel subsidy, there is a fuel crisis in the country.<\/p>\n
The PLN example, however, shows that the public can and will
\npitch in to help overcome a crisis, albeit with several
\nrequirements. Instead of just \"urging\" people to conserve energy,
\nthe government must provide clear-cut actions that are easy to
\nfollow.<\/p>\n
More importantly, once decided, the government has to
\nspearhead the movement by acting as a role model. If people are
\nbeing encouraged to use public transportation, will the political
\nelite get on the bus as well?<\/p>\n
But most importantly, the government needs to decide on
\nreactive measures -- it is too late for preventive -- to begin
\nsaving fuel as soon as possible. There are still six months left
\nin the year, but they could pass swiftly by without any action
\nbeing taken.<\/p>",
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