Pertamina to resolve kerosene shortage

Fitri Wulandari, The Jakarta Post, Jakarta

State oil and gas firm PT Pertamina plans to resume a coloring program for kerosene in a bid to tackle lingering shortages, particularly in the Greater Jakarta area, a company official said on Monday.

Pertamina spokesman M. Hanung Budya said the program, which differentiated subsidized kerosene for households -- tinted green -- from kerosene for business use, would start in the middle of this month.

"The coloring program will target areas in Greater Jakarta where kerosene shortages have been widespread," Hanung told The Jakarta Post.

Hanung said there was no timeframe for how long the color- coding program would be in place.

Pertamina stopped color coding earlier this year because it had yet to reach agreement with the government over who was going to finance the program.

The company said earlier the program cost around Rp 12 billion (US$1.41 million) per year to tint heavily subsidized kerosene for households. (Kerosene is mainly used by households on lower incomes.)

Hanung added negotiations were still ongoing with the Ministry of Finance, but Pertamina was willing to finance the program for the time being.

Kerosene shortages have worsened, particularly in Jakarta and the surrounding areas, as well as West Java and Banten provinces.

Minister of Energy and Mineral Resources Purnomo Yusgiantoro has said the shortage occurred due to the price disparity between kerosene for households and business use.

Household kerosene is sold at Rp 700 per liter, while unsubsidized kerosene for businesses costs Rp 1,800 to Rp 2,200, which has prompted retailers to sell it to businesses at a larger profit.

According to a special government team tasked with monitoring the abuse of subsidized fuel (TP3BBM), household consumption of kerosene has increased beyond the target limit of 3.75 liters per month per family.

In Jakarta alone, household kerosene consumption averages 10 liters per month per family.

Pertamina suspected that businesses bought the subsidized fuel on the black market.