Govt moves to curb kerosene shortage

The Jakarta Post, Jakarta

State oil and gas company PT Pertamina will revoke the license of any kerosene retailer caught selling subsidized kerosene for households to manufacturers.

Minister of Energy and Mineral Resources Purnomo Yusgiantoro said the harsh action had been introduced to tackle kerosene shortages ahead of the presidential election in July.

"We don't want the kerosene shortage to be politicized during the presidential election," Purnomo announced after a meeting with oil-based fuel distributors on Wednesday.

"From now on, there will be no warnings. If they (retailers) are caught selling subsidized kerosene, their licenses will be revoked immediately," Purnomo said.

Pertamina is tasked with distributing subsidized kerosene to households via appointed retailers.

Purnomo also said that any Pertamina official involved in abusing the subsidized kerosene policy would face legal action.

He said that kerosene shortages had been faced by households in some parts of the country, including Jakarta and surrounding areas, because subsidized kerosene had been sold to businesses, particularly food and beverages producers.

He said that the 12 million kiloliters of kerosene supplied by the government for households this year (kerosene is mainly used by low-income households) was more than enough.

In a bid to help curb shortages, Pertamina has introduced a color-coding program to differentiate between subsidized kerosene for households (tinted green) from kerosene for business.

Some retailers had been selling subsidized kerosene to businesses to gain greater profit from the price disparity.

The price for subsidized kerosene for low-income households is Rp 700 per liter while unsubsidized kerosene for business retails at Rp 1,800 to Rp 2,200.