Police toughen stance on fuel hoarding and smuggling

Police toughen stance on fuel hoarding and smuggling

Abdul Khalik and Apriadi Gunawan, The Jakarta Post, Jakarta/Medan

Following reports of recent fuel shortages in many regions, the
police say they have launched intensive investigations into cases
of fuel hoarding and smuggling.

In the past several weeks, the Jakarta Police have arrested
many people for alleged involvement in kerosene hoarding pending
the introduction of a planned price increase, as well as for
involvement in the black market selling of subsidized kerosene to
industry and the misuse of distribution licenses.

"We have intensified our monitoring on fuel distribution across
Greater Jakarta as we realize that fuel hoarding and other fuel
violations are becoming more common ahead of the price
increases," Jakarta Police chief Insp. Gen. Firman Gani said on
Friday.

The government announced recently that it would increase the
prices of oil-based fuels early in October.

Vice President Yusuf Kalla said last week that fuel prices
would be increased by up to 80 percent to reduce subsidy spending
and the ensuing budgetary strains.

During two months of operations, the city police say they
arrested 54 people for hoarding a total of 317 tons of fuel.

The police confiscated two tons of premium, 154 tons of
diesel, 73 tons of kerosene and 85 tons of other kinds of fuel
during the operations.

Police arrested Tan Kim Pauw, 60, on Wednesday at his home in
Palmerah, West Jakarta, and confiscated more than 3,000 liters of
kerosene after local residents complained of kerosene shortages.

Tan confessed that he bought most of the kerosene from agents
and retailers in the surrounding area for Rp 1,000 per liter, and
then sold it to several factories in Tangerang for between Rp
2,200 and Rp 5,500 per liter.

The government sets the price of kerosene for household use at
Rp 700 per liter, and Rp 2,200 for industrial use.

"Other agents applied for license from Pertamina to distribute
kerosene for households in particular areas but then sold it to
factories outside these areas," Firman said.

He was referring to the latest case in Tangerang where 13 out
of 42 kerosene agents allegedly misused their licenses by selling
the kerosene to factories outside Tangerang regency, including
Serang, Jakarta and other areas, to benefit from the higher
margin.

The normal demand for kerosene in Tangerang was about 14 million
liters, but state oil company Pertamina had distributed 29
million liters since 2003.

In Medan, North Sumatra, the Belawan port police together with
other police units were investigating the possibility of fuel
smuggling overseas through Pertamina submarine pipes.

Port police chief Sr. Adj. Comr. Dedy Prasetyo said on Friday
that they needed help in identifying Pertamina's distribution
lines. "We have often asked Pertamina officials to accompany us
in our investigations, but they have yet to respond."

The police were suspicious after learning that the pipes,
especially the two main lines, Bui I and Dermaga Jetti, which can
channel more than 20,000 tons of fuel, were not guarded.

"We don't need the military or the police because we have our
own security officers ... We never misuse the pipes for
smuggling," a Pertamina spokesman in Medan, Djoko Sasono
Putranto, told The Jakarta Post.