Pertamina could suffer Rp 4t losses due to fuel
Pertamina could suffer Rp 4t losses due to fuel
The Jakarta Post, Jakarta
State oil and gas company Pertamina could suffer up to Rp 4
trillion (US$433 million) in lost subsidies this year as a result
of a difference of opinion of the projected total supply needed
for the country as stipulated in the budget.
Under the current budget, the government will only provide
subsidies for 52.7 million kiloliters of fuel this year, which is
the government and legislators' projection of the national
consumption for the period.
But, Pertamina said Thursday that its total fuel supply for
the domestic market until the end of the year might reach between
56 and 57 million kiloliters or about 4 million kiloliters larger
than the budget's projection.
The 4 million kiloliters of fuel will cost about Rp 4
trillion.
"Thus far, the House of Representatives has not yet agreed on
the proposal to raise fuel subsidies. This means Pertamina will
likely have to cover the shortfall," Pertamina's president
Baihaki Hakim was quoted by Antara as saying on the sidelines of
the working meeting with the House of Representatives's
Commission VIII for mining and energy, environment and science
and technology.
Baihaki recalled that during the deliberation on the current
budget last year, he had told the House that the fuel consumption
projection stated in the budget was too low and thus should be
raised. But, the House insisted on the 52.7 million projection.
He said Pertamina was negotiating with the House to find a
solution, citing that it was too burdensome for the state company
to cover the entire shortfall. In its response, the House called
for an audit on the fuel supply against the national fuel
consumption for this year.
Baihaki also said Pertamina planned to sell some of its units
through initial public offerings as well as issue bonds after
2005 to finance some projects.
The company is considering those plans as a result of mounting
difficulties in obtaining loans from banks, Baihaki said.
He said Pertamina would need US$4.5 billion over the next five
years to develop its oil and gas projects.
However, plans for the unit sales and bond issue remain at an
early stage, he added. Pertamina will first have to discuss them
with the government.