Pertamina vows to secure fuel supply

Pertamina vows to secure fuel supply

The Jakarta Post, Jakarta

In a move to help safeguard fuel prices ahead of the Muslim's
fasting month of Ramadhan -- during which fuel consumption
traditionally increases -- state oil and gas firm PT Pertamina
pledges to boost supply and distribution of fuel.

Tjandra Putra, the manager of Pertamina's Marketing Unit III
(UPMS III) -- which is in charge of securing fuel supply and
distribution in greater Jakarta, West Java and Banten, ensured
fuel availability in the market despite the expected raise in
demand.

"Usually during the fasting month (which will start on
Friday), there is a 10 percent to 15 percent increase in fuel
demand from normal consumption. But, we're ready. We'll increase
fuel supply and ensure smooth distribution," Tjandra was quoted
by Detik as saying on Saturday.

Ensuring fuel supply at home during Ramadhan will be crucial
to avoid disruption in the distribution of goods, as well as
transportation, and thus help curb inflationary pressure, which
traditionally soars during the festivity particularly amid the
current surge in international oil prices.

A net-oil importer, Indonesia purchases oil-based fuel
products at high international market prices, and has to then
sell it at home at subsidized prices due to the existing fuel
subsidy policy -- a policy which has renewed criticism, as a
large portion of the subsidized fuels is enjoyed by car owners,
not poor-income people.

Various studies show that, of the subsidized fuel commodities,
only kerosene really serves the interest of the poor Indonesians.

For 2004 alone, the government has to allocate Rp 59.2
trillion for fuel subsidy -- around 2.5 times of this year's
state budget deficit of Rp 24.4 trillion.

But, reducing subsidy, which would consequently push up fuel
prices at home, has proven to be a sensitive issue and seen as
unpopular policy.

President-elect Susilo Bambang Yudhoyono has said his
government would not be afraid of taking unpopular measures, and
a change in the existing subsidy policy to a more targeted and
pro-poor scheme would be inevitable in times to come.

However, in view of those festivities, in which people will
spend more on consumption goods -- thus have less left in their
pockets. There are suggestions that any change of the existing
subsidy policy should not be made in the near future in order not
to further hurt the people's purchasing power.

Minister of Energy and Mineral Resources Purnomo Yusgiantoro
was among who raised that suggestion, saying that as such would
be more realistic if conducted sometimes next year.

"The government has to be realistic, for the fuel prices to be
increased (as a consequence of subsidy cut or removal), it has to
pass through a cabinet meeting (which has yet to be formed) and
consent from the House of Representatives.

"While at the same time, we're approaching the fasting month
and Idul Fitri. So, I think it would be difficult to do that this
year," Purnomo said in Nusa Dua, Bali on Friday.