Pertamina ups daily outputput to 190,000 kl

The Jakarta Post, Jakarta

As Oct. 1 -- the day fuel prices are going to be increase by at least 50 percent -- draws near, more people are panic buying, forcing state oil and gas firm PT Pertamina to increase its daily offtake to 190,000 kiloliters (kl).

Pertamina will restrain supply so as to not exceed the current amount needed to maintain the quota for subsidized fuel, spokesman Abadi Poernama said on Tuesday.

A supply of even 184,000 kl per day will bring the consumption of subsidized fuel to over 65 million kl a year, 10 percent higher than the quota of 59.6 million kl.

Poernama further said that the company would bring some of the fuel -- especially kerosene -- directly to consumers, instead of through agents to meet consumers' demand and to balance prices.

"We found many bogus agents in Tangerang, for example," he said, referring to entities that claim to work as fuel distributors but instead sell the subsidized fuel to industry.

Since Pertamina started applying market prices -- more than double the subsidized prices -- for fuel used by industry, many people have found new jobs as fuel traders -- queuing at gas stations to get subsidized fuel and reselling it to commercial users.

Such practices along with panic buying has caused consumption to rise dramatically, prompting long queues at gas stations in the provinces.

Pertamina will keep national fuel stocks at between 21.3 days and 21.7 days until the end of the year, said Poernama. Stock of premium gasoline will stand at 17.4 days in November and 16.6 days in December, diesel fuel at 17.8 days and 16.4 days and kerosene at 27.1 days and 29.5 days, in the respective months.

Poernama said Pertamina was refraining from buying fuel products currently, as prices had soared to US$85 per barrel from around $70 before Hurricane Katrina and Rita threatened U.S. fuel supplies.

Pertamina said last Friday that it still needed to secure 5 percent of next month's fuel imports. Poernama said the company was trying to acquire two more shipments of fuel products, equal to some one million barrels in total, from the spot market.

Pertamina plans to import 14.76 million barrels of product in October, 12.88 million barrels in November and 13.48 million barrels in December.

The company has long-term deals with several producers to supply some 60 percent of the fuel imports it needs in a month, securing the balance on the spot market.