Indonesian Political, Business & Finance News

Pertamina admits to halting additive imports

| Source: JP

Pertamina admits to halting additive imports

JAKARTA (JP): After more than two months of silence, state oil
and gas company Pertamina acknowledged on Thursday to halting the
import of Detergent III Plus, an important additive in fuel for
motor vehicles, since April 1.

"It was Pertamina's board of commissioners from the government
(DKPP) which ordered Pertamina to stop the import of the additive
in an attempt to reduce the government's budget burden this
year," Pertamina spokesman Toto Suparto told The Jakarta Post.

Pertamina, he said, should therefore not be blamed by
consumers due to the absence of the additive in gasoline sold on
the market.

"The order came from DKPP and Pertamina only executed the
order," he said.

"Pertamina would only be responsible for things which were
directly related to its decisions," Toto explained.

Toto said the board was chaired by Minister of Mines and
Energy Kuntoro Mangkusubroto and co-chaired by Minister of
Finance Bambang Subianto.

The board members included the country's state secretary and
chairman of the National Development Planning Board, Toto said.

The import termination of the additive was reported by the
business weekly Kontan in early June after being revealed by
Pertamina's director Samto Utomo.

The decision sparked resentment among car owners after several
cars' engines were reportedly damaged by the absence of the
additive in the gasoline sold on the market.

Auto mechanics and experts said the absence of the additive
used to help cleanse engines and avoid corrosion had already
damaged some vehicles, especially cars that use an injection
system.

Luxury cars were mostly affected since their engines were
sensitive, said an auto expert, Anton L.Wartawan, on Wednesday.

The country's senior observer of consumer matters, Zoemrotin
K. Soesilo, blamed the company for its unfair business practice
by not releasing a public announcement to consumers and asked car
owners to sue Pertamina.

Evaluation

Praising people's complaints, Toto said the state firm would
soon evaluate the impact of the halt to the import of the
additive.

"We'll collect gasoline samples and check them at Pertamina's
laboratory to find out the impact of the absence of the additive
in the gasoline against the performance of motor vehicles," the
spokesman said.

"If we find that the absence of Detergent III Plus in the
gasoline brings losses to the consumers, Pertamina will evaluate
the decision soon," he added.

But Toto insisted that Pertamina did not violate any
regulations, including the standard of the gasoline, by omitting
the additive.

However, he refused to give details.

The Detergent III Plus additive has been widely used in
Indonesia since 1991.

The government at that time argued the additive was important
to be used in gasoline for motor vehicles to help cleanse
engines, extend engine life, economize on gas consumption and
most of all, lower the level of carbon emissions.

The recent termination of the import was mainly aimed at
saving funds allocated by the government for the country's fuel
subsidy which this year totaled Rp 9 trillion.

"By stopping the additive's import, the state will be saving
Rp 320 billion this year," Toto said.

The Association of Indonesian Automotive Industries (Gaikindo)
also lashed out at Pertamina for its decision to stop importing
the gasoline additive.

"Other countries have even fostered the use of the fifth
generation of the detergent additive, which is better quality and
much cheaper.

So why do we have to stop the additive's third generation,"
the association spokesman FX Soeseno told Kontan.

According to Soeseno, it was the government's duty to protect
consumers.

"We therefore hope the government is highly aware of the
quality of gasoline sold on the market to avoid damage to
consumers' cars," he said.

Donny Poerbosanyoto, service manager of BMW's country
distributor PT Tjahja Sakti Motor indicated on Tuesday that
around 20 BMWs' engines were damaged by the lack of Detergent III
Plus in the gasoline. (asa)

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