Price, supply problems cause diesel scarcity

Price, supply problems cause diesel scarcity

JAKARTA (JP): The scarcity of diesel fuel over the past month
is the result of price disparities, and an agreement between the
government and the House of Representatives to reduce this year's
supply, the state-owned oil and gas company Pertamina said.

The company's distribution general manager for Greater
Jakarta, West Java and Banten (PPDN III unit), Sumarsono, told
the press here on Tuesday that diesel, which was the cheapest
fuel, was sold to the general public at Rp 900 (US$0.11), while
to industry the price charged was Rp 955.

He said that earlier this year the government and the House of
Representatives had agreed that Pertamina would only be allowed
to sell some 52.7 million kiloliters of fuel, a decrease of 3.6
percent from last year's figure of 54.6 million kiloliters.

"This target is hard to realize as the demand for fuel is
continuing to increase," he said.

He cited as an example the company's PPDN III unit which had
targeted diesel sales of 4,552,013 kiloliters this year. But
during the last eight months sales had already reached 3,491,438
kiloliters or 76.7 percent of the targeted figure.

But during a hearing with Pertamina, the House members argued
the national target was sufficient to cover demand throughout the
country if Pertamina could tackle the problem of distribution.

Sumarsono also said that certain traders also mixed the diesel
fuel with gasoline and they sold it as gasoline, which was more
expensive than diesel. "This also affects the diesel supply," he
said.

"There are also weaknesses in the distribution chain. When
diesel is being transported by our private contractors to gas
stations or to industrial sites, somewhere along the way some of
the diesel goes missing," said Sumarsono.

He added that Pertamina and the relevant government
institutions had formed a joint gasoline misuse supervision team
to investigate fuel distribution problems.

The team comprised elements from the police, the Jakarta
administration, the Ministry of Transportation and the Attorney
General's Office.

When asked by reporters whether this method was effective
given that the diesel scarcity was continuing, Sumarsono said
there had been some fuel thieves who had been brought to court.
However, he said, it was beyond Pertamina's authority to pursue
the matter further.

"We will continue to coordinate with the other institutions,"
Sumarsono said without giving any further details as to how it
would deal with the gasoline thieves.

In response to the ongoing diesel shortage, Pertamina and the
company's Directorate General of Mines and Energy were currently
re-evaluating national fuel demand.

"There's a possibility of adding to the diesel supply after
the review," Alwi Adil, a Pertamina spokesman, said.

Sumarsono said that on Aug. 31, the supply of diesel to
Greater Jakarta had been increased to 1,710 kiloliters, of which
600 kiloliters had been allocated to Muara Baru in North Jakarta.
(06/bnt)