Market fuel prices save Rp 20t a year
Leony Aurora, The Jakarta Post/Jakarta
The government can save Rp 20 trillion (US$2.05 billion) of the fuel subsidy in a year as industries are requested to pay market prices for the fuel they use, an official of state oil and gas firm PT Pertamina says.
Pertamina fuel division head Achmad Faisal said on Thursday that big industries -- those consuming more than 500 kiloliters (kl) of fuel a month -- use some 11.3 million kl of diesel fuel a year.
"The state saves Rp 20 trillion of the fuel subsidy in a year from this sector," he said.
Pertamina has applied the market price for diesel fuel for export-oriented companies, such as mining and oil entities, since July to ease pressure on the state budget, doubling it from the subsidized Rp 2,200 charged before.
As global prices continue to rise, the company raised the price of high speed diesel by 15.6 percent to Rp 5,480 a liter in August from Rp 4,740 per liter charged for July's delivery.
According to Pertamina's data, only 4.09 percent of industries use more than 500 kl of fuel in a month, but they are responsible for 73.74 percent of all fuel used in the sector.
The company has extended the application of market prices to power producers that do not sell output to state electricity firm PT PLN, industries located in bonded zones and companies that reallocate use from non fuel to fuel.
The prices are also effective for any additional allocation for industries with a fuel demand of over 24 kl per month. The fuel allocations are based on the average monthly usage in the previous three months.
Pertamina also plans to hike the prices of unsubsidized fuel, the high-quality unleaded Pertamax to Rp 5,000 from Rp 4,000 and Pertamax Plus to Rp 5,200 from the current Rp 4,400, said Faisal.
"We will raise the prices in the near future, possibly by the end of this month," he said.
The government is anxiously looking for ways to suppress the ballooning fuel subsidy, which is expected to double to Rp 138 trillion from Rp 76.5 trillion allocated in the revised 2005 state budget should the global oil price remain at $60 a barrel and without efforts to cut down consumption.