Indonesian Political, Business & Finance News

Pertalite Scarcity Signals Gradual Phase-Out

| | Source: KOMPAS Translated from Indonesian | Energy
Pertalite Scarcity Signals Gradual Phase-Out
Image: KOMPAS

JAKARTA, KOMPAS.com – Scarcity of Pertalite (RON 90) fuel is being felt across various regions. This shortage coincides with the expansion of Pertamina Signature petrol stations, which exclusively sell non-subsidised fuels such as Pertamax, Pertamax Turbo, Pertamina Dex, and Dexlite.

It is no secret that Pertalite quotas are being progressively reduced, forcing drivers to spend more on switching to Pertamax (RON 92).

Agus Pambagio, a public policy expert and advisor to the Indonesian Transport Society (MTI), stated that Pertalite has long been slated for removal due to its status as a subsidized fuel. Beyond the escalating national fiscal burden of energy subsidies, environmental concerns provide a strong rationale for phasing out Pertalite. The government has already initiated a transition towards more environmentally friendly vehicles to curb air pollution, particularly in major cities.

Agus added that Pertalite will eventually be phased out to meet Euro 4 emission standards, as current emissions from vehicles using Pertalite fail to comply with Euro 4 and are still at Euro 2 levels. “Pertalite still contains lead and is subsidised. So everyone will have to move to Pertamax (RON 92) at minimum. This has been a planned strategy for decades,” he said.

The gradual phase-out is not a new strategy. The government previously implemented a similar approach when shifting public consumption from Premium (RON 88) several years ago. “Premium was first phased out in Jakarta, followed by Pertalite, then Pertamax. From Jakarta to the rest of Indonesia, eventually meeting Euro 4 standards,” he explained.

On the downstream side, the scarcity is closely linked to upstream financial issues. As the government’s arm for distributing mandated fuel, PT Pertamina (Persero) faces a flawed compensation management system. According to Agus, Indonesia’s compensation system is chaotic, with delayed government payments for subsidies causing cash flow problems for the state-owned enterprise, disrupting the supply chain. “Pertamina is bleeding. Unpaid subsidy debts from previous years remain outstanding, which Pertamina has to bear,” he said.

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