Pertamina cuts supply for quota

Pertamina cuts supply for quota

Leony Aurora and Rendi A. Witular, The Jakarta Post, Jakarta

State oil and gas firm PT Pertamina has reduced premium gasoline
supply in trial periods in major cities, including Jakarta and
Surabaya, and is monitoring the public reaction and response to
the move before its full implementation.

Head of Pertamina's fuel division Achmad Faisal said the plan
was aimed at putting national fuel consumption on a par with the
quota set by the government.

"We lowered supply by 5 percent," he said on Monday.

"We will supply more Pertamax to cover the demand," he added,
referring to the high-quality gasoline sold for Rp 4,000 a liter.

Eventually, Pertamina aims to decrease premium gasoline
supply, sold at Rp 2,400 (24 U.S. cents) per liter, by up to 10
percent on weekends.

Reduced supply forced motorcyclists and car owners to queue up
at some gas stations in the capital on Monday. Some lined up only
to be disappointed by the "run out of gas" sign posted at several
gas stations.

In the first five months of this year, consumption of premium
gasoline nationwide was 10 percent higher than its quota, said
Faisal. Kerosene use was 4 percent more than permitted while
diesel fuel was in accordance with the quota.

"We have been providing gas stations with more fuel than what
they should get due to strong demand," he said.

The government has set a quota of 59.6 million kiloliters (kl)
for this year's domestic fuel consumption. The quota was used to
calculate a fuel subsidy of Rp 76.5 trillion in the revised 2005
state budget recently approved by the House of Representatives.

The total amount of fuel -- comprising 15.17 million kl of
premium gasoline and 26.29 kl of diesel fuel -- is lower than
last year's realized consumption of 62 million kl.

Meanwhile, Vice President Jusuf Kalla said the current high
fuel consumption could drive up this year's quota by 5 percent to
62.5 million kl, forcing the government to consider raising the
fuel subsidy.

"The price of oil is very high. Therefore, the public should
not use fuel for unproductive purposes," he said.

The price of Brent North Sea crude oil for delivery in August
reached US$57.52 per barrel, lower than last Friday's $59.48 a
barrel.

"The government will have to consult the House to revise the
state budget legislation to raise the subsidy," he said.

The government is currently preparing a fuel-saving ruling --
which would include progressive tax for automobiles as well as a
cut in the use of electricity for highway lights, advertising
billboards and shopping malls.

Separately, Minister of Energy and Mineral Resources Purnomo
Yusgiantoro said Pertamina would have to bear the burden should
fuel consumption go higher than the government-set quota.

"Pertamina has to fund the volume outside the quota itself,"
he said.

The state oil company would carry out corporate policies, such
as the weekend's premium gasoline cut, to suppress consumption,
he added.

However, Faisal said Pertamina would consider public reaction
to the trials. "It is not an official policy yet," he said.