Government urged to lift restrictions on fuel in Irian Jaya

Government urged to lift restrictions on fuel in Irian Jaya

JAKARTA (JP): Irian Jaya Governor Yaap P. Solossa has urged
President Abdurrahman Wahid to lift restrictions on fuel to
eastern areas of the country and to abolish discriminative diesel
oil pricing imposed on particular industrial users in that
region.

"I do not understand why the price of automotive diesel oil
for particular industrial users in Irian Jaya is set at Rp 1,200
(12 U.S. cents) per liter or twice as high as the government-
fixed price," Solossa told a meeting with Hari Purnomo and Hari
Purwanto, senior executives of state oil company Pertamina on
Tuesday.

Solossa said several industrial companies in his province
might be forced to stop production and make mass layoffs soon
because the punitively high price of diesel oil had made their
operations economically unviable.

"For example, PT Biak Minajaya fisheries company in Biak is
now in the process of laying off 1,500 of its 2,000 employees
because its fish production has fallen steeply due to the
grounding of many boats," he said.

The governor warned that mass layoffs at this point in time
when the political situation in Irian Jaya is heating up as a
result of stronger demand for independence would only make the
situation murkier.

No further details were immediately available as to why
Pertamina doubled the price of diesel oil for some industrial
users in Irian Jaya, including PT Biak Minajaya, since Nov.20.

A letter dated Nov. 17 from P.H. Sitompul at the Jayapura
office of Pertamina's domestic marketing department stated that
as of Nov. 20, the price of diesel oil for the Djajanti Group
would be fixed at Rp 1,200 per liter.

Sitompul explained in his letter that the decision was based
on a recommendation from the Pertamina domestic marketing
director dated Nov. 15 and a letter from the Integrated Team for
the prevention of fuel misuse.

The meeting between Governor Solossa and Pertamina officials
in Jakarta was also attended by Sunaryo and Ramawi of the
Integrated Team and Rony Sikap Sinuraya of the Djajanti Group.

Meanwhile, Pertamina spokesman Ridwan Nyak Baik told The
Jakarta Post that the Rp 1,200 price was set after a consultation
between Pertamina and export-oriented industrial users.

Baik acknowledged that the price was twice as high as the
government-fixed price because the former was based on dollar
terms.

"But the special price is voluntary in nature and was set upon
prior agreement with the industrial user," he said.

But Biak could not explain as to where else industrial users
could procure diesel oil if they did not want to pay the price
because Pertamina holds the fuel monopoly in the country.

Governor Solossa said the government should have realized how
difficult it was to attract investors to the least-developed area
of eastern Indonesia due to inadequate basic infrastructures.

"Imposing discriminative fuel pricing on companies which have
invested a great deal in Irian Jaya will not only make it more
impossible to woo new investors. Even existing investment
ventures which employ tens of thousands of workers may flee the
province," Solossa said.

Separately, Hadi Budoyo, a director of the Djajanti Group,
said on Wednesday that the doubled diesel oil price for his group
was entirely discriminative.

"Many other industrial companies in Irian Jaya, including
export-oriented firms such as plywood company PT Wapoga in Biak
and PT Usaha Mina fisheries company in Sorong, have been spared
the discriminative pricing policy," Budoyo said.

Budoyo said if the discriminative diesel oil pricing was not
lifted, PT Biak Minajaya may be forced soon to make mass layoffs
of workers. (bkm/vin)