Pertamina could face fuel scarcity
Pertamina could face fuel scarcity
Urip Hudiono, The Jakarta Post/Jakarta
With the year's fuel subsidy already spent and the House of
Representatives only starting to deliberate the 2005 state budget
revision next week, the nation risks jeopardizing its fuel
supplies if PT Pertamina fails to get additional funds to import
oil.
While the budget deliberation could take months to complete,
the government in the meantime will only be disbursing up to Rp
3.3 trillion (US$347.19 million) of its emergency reserve funds
-- about a third of the state oil and gas firm's monthly oil
import needs.
Even for that purpose, the Ministry of Finance's director
general of state treasury Mulia Nasution indicated on Friday the
government had to first discuss the possibility of disbursing its
emergency reserve fund for Pertamina with the House, though some
House members have already given the green light to do so.
Pertamina is in dire needs of cash to import oil, having spent
all the Rp 19 trillion in fuel subsidy funds allocated in the
initial 2005 state budget.
"According to our calculations, the bulk of the funds have
been spent as Pertamina also has to pay its obligations to the
government," Mulia said.
Mulia, however, said the disbursement of additional fuel
subsidy funds would be the government's priority, asserting it
would arrange a meeting with the House as soon as possible.
Minister of Energy and Mineral Resources Purnomo Yusgiantoro,
meanwhile, previously said the government would help support
Pertamina in securing at least 20 days worth of fuel supplies for
the country.
But even the additional funds from the emergency reserve would
unlikely be sufficient for Pertamina's needs, as the cash-
strapped company usually needs between $800 million and $1.1
billion each month to finance the country's oil imports.
The 2005 state budget, which the previous administration
drafted on an oil price assumption of $24 per barrel, only
provided Rp 19 trillion in fuel subsidy funds for the whole year.
With world oil prices lately surging past $50, however, the
government decided to hike domestic fuel prices by an average of
29 percent in March and proposed an oil price assumption of $35
per barrel in the budget revision, to cut the bloating fuel
subsidy from Rp 60.1 trillion to Rp 39.7 trillion.
A delay in the government's fuel subsidy disbursement would
mean that Pertamina would have to cover the cost of importing oil
first, before later asking the government for reimbursement.
The House will begin its deliberation of the state budget
revision next week -- but the longer it takes, the bigger
Pertamina's financial needs will become.
Chairman of the House's Commission XI for financial affairs
Paskah Suzetta said on Wednesday the government may directly use
its emergency reserves for additional fuel subsidy funds before
the deliberation process starts.
"The government can use it as long as it is under the close
monitoring of the House," he said.
Paskah further said the House's deliberation of the budget
revision would likely be a two-step process, taking into account
the more urgent issues of additional fuel subsidy funds, and
funds for the reconstruction of tsunami-affected Nanggroe Aceh
Darussalam province.