Govt disburses subsidy funds to Pertamina
The Jakarta Post, Jakarta
The current cashflow problems being experienced by state oil and gas company Pertamina will not disrupt national fuel supply as the government has started disbursing fuel subsidies.
For the first phase, the government disbursed Rp 4 trillion (US$421 million) last Friday in fuel subsidies to Pertamina to assist the company pay for oil imports.
Coordinating Minister for the Economy Aburizal Bakrie told reporters on Monday that the funds were only "emergency funds" as both the government and Pertamina had yet to discuss the obligations between them in regard to the money.
"We have to look into the problem carefully to see each sides obligations. It remains unclear who owes who, and who is supposed to pay who," he said.
"I expect the Ministry of Finance and Pertamina to sit down together and solve the problem."
Pertamina has repeatedly complained that the government was slow in reimbursing its fuel subsidies, which as of March reached Rp 23 trillion.
The finance ministry, meanwhile, argued that Pertamina's financial reports should be audited first before the company was reimbursed for the fuel subsidies.
Without the fuel subsidies, Pertamina could fall short of cash and fail to keep the national fuel stockpile at a secure level of 22 days of consumption.
Minister of Energy and Mineral Resources Purnomo Yusgiantoro was quoted by Antara as saying that he had asked the finance ministry to disburse the funds needed by Pertamina to import fuel.
"We have to help Pertamina's cashflow, otherwise it might affect the country's stockpile of fuel," he said.
Purnomo explained Pertamina was having difficulty importing oil as some banks had refused to issue the company with letters of credit (L/C) required to guarantee import payments.
Pertamina spokesman Abadi Poernomo recently said that Bank Negara Indonesia and the Hong Kong Shanghai Banking Corporation had refused to issue letters of credit to Pertamina as the firm had yet to repay a total of Rp 9 trillion for import financing from the two banks.
Saudi Aramco, the world's biggest oil company, refused to unload a cargo of fuel in Indonesia because Pertamina failed to provide a payment guarantee, Bloomberg reported.
Pertamina has to spend some Rp 8 trillion each month to import fuel.
Indonesia needs 178 thousand kiloliters of fuel per day -- 74,000 kiloliters of diesel fuel, 44,000 kiloliters of Premium- type gasoline and 32,000 kiloliters of kerosene.
In this year's business plan, Pertamina expects replacement funds from the government for the processing and distribution of domestic fuel of Rp 60.13 trillion, down from Rp 71.45 trillion last year.
The company's income from other sources of revenue is projected to decrease to Rp 4.16 trillion from Rp 8.88 trillion.
In addition, Pertamina expects revenue from fuel sales to decline slightly to Rp 79.27 trillion from Rp 80.91 trillion. Revenue from fuel exports is also expected to decline to Rp 18.45 trillion from Rp 18.76 trillion.
Overall, the company's operating revenue is projected to reach Rp 197.74 trillion this year, from an estimated Rp 213.52 trillion last year.