Pertamina only has cash for a month of key imports

Pertamina only has cash for a month of key imports

The Jakarta Post, Jakarta

State oil and gas firm PT Pertamina has about Rp 10 trillion
(US$1.05 billion) in cash, which is roughly enough to cover fuel
imports for a month, Minister of Energy and Mineral Resources
Purnomo Yusgiantoro says.

The government disbursed Rp 4.1 trillion in fuel subsidies in
an emergency measure and the company had some Rp 1.5 trillion in
its account, the minister announced to the public on the
sidelines of the inauguration ceremony of the new Oil and Gas
Upstream Regulatory Agency's (BP Migas) chairman, Kardaya Warnika
here on Tuesday.

"It (Pertamina) receives about Rp 5.5 trillion in revenues
from fuel sales each month," he said. "In total, it has about Rp
10 trillion."

To cover domestic fuel demands, Pertamina needs about $1
billion a month to pay for the imported fuel, based on state
budget's oil prices assumption of $36 per barrel.

Earlier this week, Pertamina announced that it was having
difficulty importing oil. Some banks had refused to issue the
letters of credit (L/C) required to guarantee import payments, as
Pertamina still owed other banks some Rp 9 trillion.

Bloomberg has reported that Saudi Aramco, the world's biggest
oil company, and Kuwait Petroleum Corp. have refused to unload
cargoes of fuel due to the lack of the L/Cs.

Such difficulty, which was not the first to be experienced by
Pertamina, raised the alarm all over the country of a possible
fuel shortage.

The government has made an effort to speed up the disbursement
of fuel subsidies to Pertamina, particularly after oil started
hitting record highs of over $50 per barrel last October. The
current global oil price is at around $54 per barrel.

Through a presidential decree, the government stipulated that
Pertamina could collect between 90 percent and 95 percent of its
fuel subsidy money with only a monthly verification letter from
the Ministry of Finance.

The rest of the funds will be handed over after an audit by
the Supreme Audit Agency (BPK) is completed.

Purnomo acknowledged that the subsidies from the first three
months of the year were yet to be disbursed. "There are also
several months from last year where the audit has not yet been
completed," he added.

The fuel subsidy fund that the government will pay Pertamina,
amounts to more than Rp 23 trillion.

Pertamina president director Widya Purnama confirmed that the
company had received the Rp 4.1 trillion. Fuel subsidies had to
be disbursed in phases, he said. "We will talk about this with
the finance ministry," he added.