Pertamina's unpaid debts reach US$732m
JAKARTA (JP): State oil and gas company Pertamina has arrears of about US$732 million to crude and fuel importers, shipping companies and gas suppliers.
Pertamina president Soegianto said the company was behind in debt payments because it had yet to receive payment from several fuel gas buyers.
In addition, he said, Pertamina also had not received the money from the government to offset the subsidies for the fuel sales.
"Anyway, we shall find ways to settle the debt," he said in a hearing with the House of Representatives's Commission VIII for state budget and finance, and science and technology.
Soegianto said the debt included the payment of crude and fuel imports to its former affiliates Perta Oil Marketing Ltd and Permindo Trading oil, the payment of fuel and oil shipment to shipping companies and the purchase of crude and gas to several production sharing contractors.
The government has thus far yet to reimburse Pertamina Rp 12.1 trillion ($806 million) for fuel subsidies.
"Minister of Finance (Bambang Subianto) has promised to pay us Rp 2.1 trillion of the unpaid fuel subsidies today," Soegianto said.
The government has allocated fuel subsidies amounting to Rp 9.4 trillion for the current fiscal year on the assumption that the average crude oil price is $14.5 per barrel and the exchange rate averaged Rp 6,000 per dollar throughout the year.
The subsidy will rise by Rp 5 trillion whenever the rupiah's value falls by Rp 1,000 against the dollar. The subsidy will thus rise to Rp 34.4 trillion if the exchange rate averages Rp 10,000 per dollar this year.
Soegianto said Pertamina had been faced with difficulties in importing fuel for several weeks amid the cash flow problem following the rejection of Indonesian letters of credit (L/C) abroad.
The company failed to import 900,000 barrels of crude oil from Australia's Broken Hill Pty Ltd and Mobil Corp since both companies demanded that Pertamina's L/Cs were guaranteed by first class international banks.
The problem was solved after the central bank guaranteed the company's L/Cs starting July 1, he said.
"I have not heard of any more problems in fuel and crude imports after the central bank guaranteed our L/C," Soegianto said.
He said Bank Indonesia would provide $100 million to guarantee Pertamina's L/Cs, including $50 million to guarantee L/C for fuel imports and $50 million for crude imports.
Indonesia, though a net oil exporting country, imports 15 percent of its annual fuel consumption of 52 million kiloliters (325 million barrels) due to the limited capacity of Pertamina's refineries.
Pertamina also imports about 71 million tons of crude oil from Saudi Arabia, Malaysia and Australia for its refineries to produce certain kinds of fuel, asphalt and lubricating oil, which cannot be made from Indonesian crude oil.
Pertamina finance director Hadi Sudibyo said during the hearing that Pertamina still had $4.18 billion, 11.8 trillion and Rp 485 billion in long term debt for the financing its refinery and liquefied natural gas (LNG) plants projects.
But the company did not face any problems in paying off the debt since it would be paid with the output of the plants, Hadi said.
Soegianto said Pertamina had millions of dollars in outstanding claims to its clients.
Several domestic air carriers, including Garuda Airlines, the now closed Sempati Air and Merpati Airlines, for example, owed the state oil company $30 million while gas buyers, including state gas distributor PGN and state electricity company PLN, owed about $150 million. (jsk)