Pertamina prepared for possible run of fuel
Pertamina prepared for possible run of fuel
JAKARTA (JP): State oil and gas company Pertamina assured the
public on Thursday that it had enough fuel to handle a possible
run arising from the government's decision to raise fuel prices
by an average of 30 percent.
"Pertamina is ready to respond to a sudden increase in fuel
demand within the next few days," said Pertamina president
Baihaki Hakim on the sidelines of a hearing with legislators to
discuss the new oil and gas bill.
"Our national fuel stock is safe for 22 days, our refineries
are operating at full rates, and there is no problem with our
fuel tankers," he said.
The government plans to raise fuel prices by an average of 30
percent starting today, yet the exact timing remains unclear as
it wants first to study the impact on society.
Minister of Energy and Mineral Resources Purnomo Yusgiantoro
said on Thursday the fuel price hike would be postponed, pending
a review in the security situation.
Newly appointed Minister of Finance Rizal Ramli said that the
decision on the implementation of the new fuel price would be
decided on Friday (today).
Under the plan, only fuel sold to the public will be
increased.
The price of gasoline will be raised to Rp 1,450 (about 12.9
U.S cents) per liter from the current price of Rp 1,150 per
liter, automotive diesel oil to Rp 900 from Rp 600, and kerosene
to Rp 400 from Rp 350.
In the past two days, Baihaki said, Pertamina had recorded a
surge of between 10 percent to 15 percent in fuel demand in
several cities.
"This is only temporary, as people are trying to get the fuel
while it is cheap," he explained.
A sudden delay of the fuel price hike, however, could extend
the run period that Pertamina had to cope with.
"For Pertamina this (delay) shouldn't be a problem, we have
enough stock. It's a matter of who can hold one's breath the
longer; a run can't last forever, there is a limit," he said.
According to him, based on earlier experience a run lasted for
only about a week.
On the management side, he continued, Pertamina had tightened
coordination with its distribution units to closely monitor fuel
demand.
"We've taken concrete steps, there'll be coordination among
all distribution units, or else what I said in Jakarta won't have
been acted upon," he said.
However, he warned that fuel smuggling was of greater concern
to Pertamina than a run on fuel.
The money wasted on subsidized fuel smuggled out of this
country, had been the center of debate during the revision of
this year's state budget.
The House of Representatives' budget commission charged that
rampant fuel smuggling distorted the fuel consumption data the
government had used to calculate its subsidy expenditure.
Data from Pertamina forecasted a fuel consumption of 54.8
million kiloliters for this year. This would amount to a subsidy
of around Rp 60 trillion, providing fuel prices were hiked by an
average of 30 percent as of June 15.
Legislators queried the figure, stating that consumption was
only 44 million kiloliters when industry was operating at full
production before the economic crisis hit.
Both sides later settled on a consumption level of 52.7
million kiloliters, or a level equal to last year's consumption.
(bkm)