$1.5b needed to bring fuel stocks back to normal
Leony Aurora, The Jakarta Post, Jakarta
Long queues at gas stations across the archipelago are likely to continue for another week as domestic stockpiles for Premium gasoline and diesel fuel have dropped to 12.7 days and 14.5 days, respectively, as a result of Pertamina's cash flow problems.
State oil and gas firm PT Pertamina's president director Widya Purnama said on Monday in a hearing with the House of Representatives that 3.2 million barrels of fuel products had just begun to be unloaded.
The supplies arrived a week ago but the company could not unload them as it did not have sufficient funds to pay.
"The (subsidy) funds only came in on June 15," he told members of the House' Commission VII, overseeing energy and mining.
Domestic fuel stocks stood at 17.5 days on Monday, far lower than the ideal of at least 22 days of supply. Pertamina has sufficient kerosene -- used mainly by low-income families and small industry -- to last another 25.3 days.
Widya said Pertamina needed about 10 days to unload and distribute the fuel and raise stocks to 20.5 days. "We expect stockpiles to rise on June 24 or June 25," he said.
The Ministry of Finance disbursed Rp 4.02 trillion (US$418 million) last week, which was used to pay three letters of credit (L/Cs) for previous months' imports.
"To increase domestic fuel stocks back to (the normal level of) between 22 and 25 days, we need between $1.3 billion and $1.5 billion," said Widya.
Local media have reported that several areas in the country are experiencing fuel shortages. Motorists in Lombok in West Nusa Tenggara, Semarang, Surabaya and Medan have had problems finding Premium fuel over the past few days.
The Grati power plant in Pasuruan, East Java, could not be operated on Monday as diesel fuel was not available, state power firm PT PLN reported.
"As a result, the Java-Bali power grid will see a deficit of 658 megawatts (MW) during peak hours tonight," said Mulyo Adji, general manager of the Java-Bali grid's center for power distribution.
Responding to Pertamina's cash flow problems, Commission VII recommended that the Minister of Energy and Mineral Resources assist in coordinating with the finance ministry to smooth the way for the subsidy funds to reach Pertamina.
"Fund disbursement to Pertamina should be a priority to guarantee fuel supplies throughout the country," said the commission.
It was unclear from where Pertamina would get sufficient funds to bring stockpiles back to the ideal level.
"A team comprising Pertamina and the finance ministry is currently calculating the amount to be paid by the government," said Widya.
He declined to give a specific time frame for the results.
Pertamina is also planning to take loans of between $500 million and $700 million to be used as bridging funds for future imports.
"The board of commissioners in principal have agreed (to the loan). We're just waiting for their (signed) approval," said Widya.
Global oil prices reached their highest levels at $59.23 per barrel on Monday, despite the Organization of Petroleum Exporting Countries' (OPEC) decision to add another 500,000 barrels of oil per day (bpd) to its official quota.
Indonesia has to import 300,000 bpd of crude oil for processing at Pertamina's refineries, which have a total processing capacity of one million barrels of crude oil per day.
To fulfill domestic demand, Pertamina also needs to import 400,000 bpd of fuel products.