Government threatens firms abusing fuel subsidies
JAKARTA (JP): The government warned on Tuesday that it would order state oil and gas company Pertamina to cut the fuel supply of companies suspected of abusing fuel subsidies
Minister of Energy and Mineral Resources Purnomo Yusgiantoro said companies which were found to have abused fuel subsidies would be asked to import their fuel.
The minister said that a sharp drop in the industrial fuel demand from Pertamina's fuel depots indicated that some companies had abused the fuel subsidies.
The loss, caused by the suspected violation, might amount to about 10 percent of the estimated Rp 3 trillion (US$160 million) the government hopes to save from the new fuel tariffs.
"Defiant companies deserve to be punished," Purnomo told reporters on the sidelines of a seminar on the electricity sector.
Purnomo was responding to a report from the government's team set up to monitor the implementation of fuel subsidies.
In an effort to trim subsidy spending, the government has required industrial users to purchase fuel at 50 percent of international market prices.
The policy, effective since April 1, has caused fuel prices for industries to jump by an average of 100 percent.
Industrial users must purchase the fuel at Pertamina's fuel depots. Gas stations that sell fuel at fully subsidized prices, are not allowed to sell their fuel except to motorists.
Purnomo said that most of the leakage might have occurred because companies purchase fuel at gas stations instead of at Pertamina's fuel depots.
Kompas Daily reported on Tuesday that industrial orders for diesel oil in Greater Jakarta had dropped in May to 126,629 kiloliters (kl) from 211,048 kl in April.
Suspiciously, at the same time several gas stations had reported a shortage of fuel supplies.
The paper quoted data from a government inter-ministerial team, which said that many companies had even placed zero orders for May.
They include, among others, state railway operator PT Kereta Api Indonesia which held a previous month's purchase of 3,648 kl; textile company PT Argo Pantes with 1,400 kl, Lippo Supermall with 400 kl, Hotel Indonesia with 216 kl; PT Indah Kiat Pulp & Paper with 1,200 kl; business group Texmaco with 800 kl; and tire producer PT Gajah Tunggal with a previous month's purchase 2,640 kl.
American oil and gas company Maxxus, however, recorded the biggest drop as it purchased only 700 kl in May compared to 8,000 kl in April.
Foreign oil and gas companies are required to pay fuel at full market prices.
Others which are also suspected of violating the fuel subsidies include PT Semen Cibinong, PT Unilever Indonesia, and PT Krama Yudha Kusuma Motor.
Semen Cibinong denied in a statement that it had violated the subsidy scheme as reported by the team. The company said that each month it paid Pertamina a 100 percent down payment for its fuel, thus buying the fuel from gas stations is unlikely.
Purnomo said that if a company placed only 50 percent of its regular fuel purchase order, Pertamina would stick to that amount, even though the company had later asked for more.
"If you (the company) ask for more we will say no; you just go and find the fuel outside (of Indonesia)," he added.
Purnomo further said the government did not intend to punish these companies immediately, but would first issue them with a warning.
He said he would summon the companies on Wednesday (today) or Thursday, and urge them to refrain from continuing abusing fuel subsidies.
Asked about the legal sanctions for these companies he said he would let the police and the Prosecutor's Office take care of the legal side.
To control the fuel distribution, he went on, the government planned to crack down on companies buying fuel from gas stations.
Purnomo said these companies might have used cars or trucks to pump the fuel into their gasoline tanks at nearby gas stations. (bkm)