City to cut kerosene red tape

The Jakarta Post, Jakarta

In an effort to ensure more even distribution of kerosene, the city administration will endeavor to cut through the distribution chain, an official has said.

Assistant to the city secretary for people's welfare Rohana Mandala said over the weekend the policy was made in response to complaints over frequent scarcity of the commodity -- mostly used by low-income families as a cooking fuel.

Rohana refused to reveal details of the policy, but according to a member of her staff, the administration would ask state oil and gas company Pertamina to distribute kerosene directly to wholesalers, and not go through agents.

"We believe that cutting through procedures will make kerosene distribution smoother," said the official, who was speaking on condition of anonymity.

Currently, Pertamina distributes kerosene through some 217 agents across the city. The agents then distribute it to some 1,283 wholesalers, who distribute it to consumers through small traders.

The current price of kerosene in Jakarta is Rp 885 (9 US cents) per liter at wholesalers. Small traders are permitted to resell for Rp 1,200 per liter. However, in actual fact, traders sell kerosene for up to Rp 1,500 per liter.

The kerosene quota for the capital is around 3,500 kiloliters per month, representing 15 percent of total national consumption.

According to Rohana, the quota was more than enough to meet the demand of less than 100,000 families who use kerosene as a cooking fuel, and, therefore, kerosene scarcity was technically impossible.

Suspecting that illicit hoarding was occurring in order to force prices up, Governor Sutiyoso would soon issue an decree for tougher monitoring of kerosene distribution.

In the decree draft, the monitoring of kerosene distribution will involve mayors/regents, district heads, subdistrict heads, heads of community units, and heads of neighborhood units.

"Currently, we are not involved in monitoring kerosene distribution. All these tasks are carried out by Pertamina and their agents. With the governor's decree, we will actively monitor the distribution ourselves," said the source.