Local govts to monitor distribution of kerosene

Local govts to monitor distribution of kerosene

Leony Aurora and Rendi A. Witular, The Jakarta Post, Jakarta

The government will soon allow local administrations to impose a
levy on kerosene distributors to help them monitor the
distribution of subsidized kerosene across the country.

Monitoring costs will reach Rp 500 billion (US$50 million)
next year, with regional governments taking Rp 50 for each liter
of the 10 million kiloliters of subsidized kerosene predicted to
be used by households in 2006.

The money collected by the local administrations would be used
to monitor kerosene distribution down to the village level,
Minister of Energy and Mineral Resources Purnomo Yusgiantoro said
on Thursday.

"It will be regulated through bylaws," Purnomo said in a press
conference held after a meeting with regional secretaries and
provincial village empowerment agencies.

A decree issued by Minister of Home Affairs M. Ma'ruf on Oct.
3 stipulates that the national ceiling price for one liter of
kerosene is Rp 2,275.

The price includes the subsidized price of Rp 2,000 a liter,
transportation costs to a radius of 40 kilometers from depots at
Rp 80 per liter, monitoring costs of Rp 50 a liter, as well as
agent and distributor fees of Rp 55 and Rp 90 a liter,
respectively.

After the government raised kerosene prices to Rp 2,000 a
liter on Oct. 1 from Rp 700 a liter, there have been reports that
kerosene was being sold at up to Rp 3,500 a liter to consumers in
some regions.

Ma'ruf, who also attended the meeting, said local governments
should determine their individual ceiling prices according to
each area's geographical condition and purchasing power "as soon
as possible".

"They know precisely the conditions in their areas," said
Ma'ruf.

He also urged that the authority take preventive measures to
make sure that price setting and other violations were minimized.

Pertamina's role as regulator and supervisor in the downstream
sector has been relinquished to the Oil and Gas Downstream
Regulatory Agency (BPH Migas) with the implementation of the new
oil and gas law and its supporting regulations.

BPH Migas will coordinate with local administrations and the
police to conduct fuel monitoring, particularly on kerosene,
which is used mainly by low-income families.

Home ministry village empowerment agency director general
Darjo Sumarjono said that at present, the costs to supervise fuel
distribution were taken from the local budgets.

"Several areas cannot afford to allocate budgets for a
complete supervision," Sumarjono said.

Pertamina through the Association of Oil and Gas Entrepreneurs
(Hiswana) will collect the monitoring costs for now. Local
administrations will take over after the bylaws supporting the
home minister's decree are completed.

Meanwhile, the government is planning to distribute 10 million
briquette stoves to families living below the poverty line in
order to cushion the impact of the recent rise in fuel prices.

"We will provide the free briquette stoves for poor people as
part of our to campaign to reduce the use of kerosene,"
Coordinating Minister for the Economy Aburizal Bakrie said after
a meeting with Vice President Jusuf Kalla.

Aburizal appealed to the public to start using briquettes
because they cost lower than kerosene and were easier to get.
With the same energy output, a pack of briquettes is sold at
around Rp 1,500, while a liter of kerosene is at least Rp 2,000.