Pertamina to reward police if they thwart fuel crime

The Jakarta Post, Jakarta

State-owned oil and gas firm Pertamina said on Monday that it had proposed to the government to give the National Police a reward if they were successful at foiling attempts to smuggle or hoard fuel.

Pertamina downstream director Muchsin Bahar said that the company was considering handing over half of the confiscated fuel to the police as a reward.

Speaking to reporters at a media conference held to unveil Pertamina's financial performance in 2001, Muchsin said that the planned incentive was needed to help curb the widespread practice of fuel smuggling and hoarding.

He, however, said that the incentive program had yet to be agreed by both the government and the police.

Fuel hoarding, especially of kerosene, has become common practice following the government's plan to raise fuel prices by an average of 30 percent.

The hoarding of fuel has caused shortages in many provinces and a surge in kerosene prices.

During the past couple of weeks, kerosene prices have soared to Rp 1,200 (11.5 U.S. cents) per liter in many parts of the country compared to the official price of Rp 400.

Pertamina has launched "market operations" aimed at restoring the kerosene supply to areas hit by shortages, but so far, the result has not been effective.

Muchsin said Pertamina expected the government not to further delay the announcement of the hike in fuel prices, so as to bring an end to fuel hoarding.

Separately, Coordinating Minister for the Economy Dorodjatun Kuntjoro-Jakti said the government had decided to audit last year's compensation.

The government has been criticized for not being transparent in the use of compensation money, which was aimed at helping the poor deal with the fuel price hike.

The government provided Rp 800 billion in compensation last year.

It plans to provide Rp 2.2 trillion this year, but according to the Minister of Energy and Mineral Resources, the amount might be raised to Rp 2.8 trillion.