Pertamina misleads public in defining 'retail price'

Damar Harsanto, The Jakarta Post, Jakarta

State-run oil and gas company Pertamina revealed on Friday how it misled the public about the price of kerosene.

It's explanation partly explains why the price is about double the Rp 600 "retail price" set by the company.

The government announced on Jan. 16 that kerosene for households and small enterprises was to increase from Rp 400 to just Rp 600 per liter. Since then the price has soared to between Rp 1,000 and Rp 1,500 per liter, prompting widespread outrage.

Public confusion was answered by Pertamina on Friday when it said that what it meant as the ceiling retail price, was in fact the price Pertamina sells the kerosene to dealers.

The retail price was the kerosene price per liter based on a radius of 40 kilometers. In Jakarta, the administration decided on Jan. 17 that the price was Rp 760 per liter.

The further the distance from Jakarta, the more expensive the price becomes. In West Java, the price is Rp 740 per liter while in Banten the price is yet to be announced but is expected to be Rp 738 per liter.

Ngatiman, a kiosk owner from Tangerang, claimed he bought the kerosene from subdealers for Rp 1,000 per liter and sold at Rp 1,100.

The Indonesian Consumers Foundation (YLKI) chairwoman Indah Suksmaningsih blasted Pertamina for misleading the public.

"Pertamina definitely didn't give the right explanation to the consumers. They gave the illusion that the kerosene price only slightly increased. The fact is that at the market the price is far too high above the ceiling retail price."

Indah recommended Pertamina distribute placards showing the standard kerosene price to control prices. She also urged Pertamina to change the ceiling retail price term into the ceiling profiteer price.

The prices of other fuels are the same throughout the country -- premium (sold at Rp 1,550), automotive diesel oil (Rp 1,150), industrial diesel oil (Rp 1,110) and fuel oil (Rp 925).

However, kerosene prices vary widely.

Pertamina declined to be responsible for the skyrocketing kerosene price at the retail level.

"The working contract between Pertamina and kerosene dealers states that Pertamina's charge (over its supply) will end once the tanker trucks carrying the kerosene leaves through Pertamina's depot gate," said Sumarsono, Pertamina marketing unit III's general manager overseeing fuel supply in West Java, Jakarta and Banten provinces.

"Outside the gate, it's the dealers' responsibility to transport the kerosene to the consumers' hand."

Sumarsono blamed the "irrational" price on the long-chain from dealers, subdealers and retailers.

YLKI saw Pertamina's statement as an attempt to evade the charges.

"If Pertamina wants to seek an excuse from the responsibility, they must release their business as the (natural) source belongs to the people," Indah said.

Even though Sumarsono said that it was not responsible for the soaring price hike, it vowed to take firm measures to crack down on dealers and subdealers found guilty for increasing kerosene prices to inflated levels.

"We've asked the police for help to eradicate irregularities in exchange for a 50 percent share of the confiscated fuel," Sumarsono said.

Police along with Pertamina's personnel have reportedly confiscated thousands of tons of hoarded fuel during a two-week operation.

Sumarsono even complained that all confiscated fuel -- being stored as police "evidence" -- was now being stored at Pertamina's depots which in turn took up existing space for Pertamina's own fuel.

"We can do nothing to the evidence as the legal proceeding drags on. We can't mix it with our own fuel so larger spaces are needed for them," he said.