Indonesian Political, Business & Finance News

Indonesia to be lead-fuel free by 2005: Minister

| Source: JP

Indonesia to be lead-fuel free by 2005: Minister

Johannes Simbolon and A'an Suryana, The Jakarta Post, Denpasar, Bali

The government declared on Saturday that Indonesians will
enjoy much cleaner air by 2005, when all of the vehicles on the
country's roads are expected to be using unleaded gasoline.

State Minister for the Environment Nabiel Makarim said the
government was campaigning for the use of unleaded gasoline
because of the alarming pollution levels in major cities across
the country.

"Jakarta, for example, has just been tipped as the third most
polluted city in the world. We have no other choice but strive to
overcome this status by 2005," Nabiel told reporters on Saturday
during the launch of the Lead-Fuel Free Program for Bali on the
resort island.

The ceremony was also attended by Minister of Energy and
Mineral Resources Purnomo Yusgiantoro, the president of state oil
and gas company Pertamina, Baihaki Hakim, and Bali Deputy
Governor I Ketut Wijana.

Beginning on Saturday unleaded fuel is available at all 84 gas
stations on Bali, an official said.

The lead-fuel free program was started by the government in
July 2001 and already has been launched in Jakarta, Cirebon (West
Java), and Bali.

The phasing out of leaded fuel was initially set to begin
nationwide by 2003, but financial constraints forced the
government to move back that date to 2005.

Baihaki Hakim said that some 30 percent of total leaded fuel
nationwide had been replaced by unleaded fuel products.

He expressed hope that by 2005, cars nationwide would switch
to unleaded fuel, which is less polluting.

In order to help support the program, Pertamina said it would
modify the Balongan and Cilacap refineries in order to produce
more unleaded fuel.

Baihaki said that for the modification to the Cilacap refinery
the company had obtained some US$300 million in loans from a
consortium of financial institutions, whose members include
Japan's Mitsui and Paribas Bank Singapore.

"The loan is a commercial loan," said Baihaki, adding that the
loans would be repaid by Pertamina.

Nabiel acknowledged that switching to unleaded fuel would
create additional costs, but that these costs were outweighed by
the health hazards of leaded gasoline.

"Leaded fuel can degrade human intelligence, especially for
children below five years of age," he said.

A health survey by the World Bank in 1994 estimated that more
than one million children in Jakarta had their intelligence
degraded by emissions of leaded fuel, he said.

Besides damaging human intelligence, leaded fuel also can be a
factor in heart disease, can cause behavioral problems, affect
fertility and cause hypertension.

Lead is added to fuel to boost engine performance (octane).
The health costs related to leaded gasoline are estimated at Rp 2
trillion (about $210.5 million) annually.

Leaded gasoline for two-stroke engines is usually used by
motorcycles and three-wheeled bajaj.

Examples of unleaded fuel products are Petro 2TT "blue
gasoline" and Super TT, which account for less than 1.5 percent
of all gasoline sold in the country.

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