Big business may be stuck with bill to color code kerosene
Big business may be stuck with bill to color code kerosene
Fitri Wulandari, The Jakarta Post, Jakarta
Large companies and factories that use kerosene may have to
shoulder the cost of color coding subsidized kerosene for
households under a new government plan, according to a minister.
Minister of Energy and Mineral Resources Purnomo Yusgiantoro
said that it was one of the options being considered so that the
program was more more effective, and to help resolve the
lingering kerosene shortages suffered by low-income households in
several parts of the country.
"Pertamina (the state-owned oil and gas company) is unable to
cover the cost. The government could cover the cost from the
state budget, but we think it should be the responsibility of
each company," Purnomo told reporters on Tuesday.
Purnomo said the proposal was still being discussed with
related ministries. If the plan is agreed upon, each company
will have to pay more for the kerosene.
Pertamina stopped the color-coding program earlier this year
after telling the government it was not going to finance the
program, but talks are still ongoing. At the time, kerosene for
households was tinted green.
However, the company said it planned to resume the program and
finance it temporarily after kerosene shortages increased in
recent months.
Purnomo has said that the kerosene shortage was caused by
price disparity between kerosene for households and business use.
The price for household kerosene was set at Rp 700 per liter
(with a government subsidy), while the price of unsubsidized
kerosene for big business is currently set at between Rp 1,800
and Rp 2,200.
This has prompted designated household retailers to sell their
kerosene to companies at a much higher price.
Rachmat Drajat, Pertamina's deputy downstream director for
business and marketing was quoted by Antara as saying the company
plans to import a coloring substance from the United Kingdom.
The program is scheduled to resume in the middle of this month
and target Greater Jakarta where kerosene shortages have been
rampant.
According to Rachmat, it would take 14 days to ship from the
United Kingdom.
The coloring substance costs Rp 5.75 per liter. It would cost
Pertamina an estimated Rp 60 billion per annum to color some 84
million kiloliters of household kerosene.
Rachmat said the company plans to resume the program to
prevent retailers from selling the household kerosene to
companies or by using it as mixture for diesel fuel or gasoline.
Antara reported price of household kerosene has been
skyrocketing due to the shortages. People now have to buy it for
Rp 1,500 per liter.