Corruption and greed blamed for kerosene crisis in North Sumatra

Apriadi Gunawan, The Jakarta Post, Medan, North Sumatra

State oil and gas company PT Pertamina's Marketing Unit I of the Medan office accused on Saturday two parties behind the shortage of kerosene in North Sumatra province, namely Pertamina's distributors and a certain "kerosene mafia."

Juliadi, Pertamina spokesman in North Sumatra, revealed a recent finding that 13 Pertamina distributors had breached contracts with Pertamina, which resulted in the shortage of kerosene in some areas.

He said those 13 distributors were among 212 distributors in North Sumatra, whom Pertamina supplied with between 20 and 30 tons of kerosene a day.

The irregularities committed by the distributors were only part of the problem as well as the fact that they sell the kerosene above the maximum price set by Pertamina, a state company tasked by the government to maintain a stable price.

Juliadi divulged that the 13 distributors had sold kerosene above Pertamina's official maximum retail price (HET) of Rp 950 (about US 11 cents) per liter.

"The irregularities were found with distributors in Belawan, Tanjung Balai, Medan and Asahan," Juliadi said.

Besides increasing the price above the HET, the distributors also smuggle kerosene to sell it to large companies, mostly foreign ones, in cooperation with a "kerosene mafia", instead of selling it to public, he said.

He said that the organized smuggling ring's henchmen would buy the kerosene from Pertamina distributors, and smuggle it abroad, especially to Singapore and Malaysia, via Tanjung Balai port.

They smuggle abroad because the price of kerosene is much higher in those two countries.

"The kerosene was transported in small boats and then loaded onto larger ships out at sea," he said.

He said that the smuggling attempts were often reported to the authorities, but he had no idea why only few of the smugglers were arrested.

According to Juliadi, the irregularities committed by those distributors and the "kerosene mafia" had led to the shortage of kerosene in public market.

As a result, the price of kerosene has increased sharply, and the pubic has suffered. Umaimah, a housewife from the Mariendal area of Medan, for example, usually has to wait hours to buy the overpriced kerosene.

"If there even is some left, the price will already have increased to Rp 1,300 per liter," Umaimah said on Saturday.

The normal price of kerosene should be around Rp 1,000 per liter.

In order to deter the distributors from again manipulating the supply of kerosene, Juliadi said that Pertamina had taken stiff measures against the distributors under its supervision.

"Pertamina has revoked permits of two distributors, while we cut the kerosene supply to the remaining 11 distributors between 2.5 and 5 tons each day," he told The Jakarta Post on Saturday.