RI to import fuel to meet supply shortage

JAKARTA (JP): Indonesia may import fuel from neighboring countries to overcome pressing fuel shortages in East Java and Bali, Minister of Mines and Energy Susilo Bambang Yudhoyono said on Wednesday.

"I've told (state oil and gas company Pertamina) that during a crisis like this we must resort to importing fuel to meet demands," he told reporters prior to attending a weekly Cabinet meeting.

Bambang was commenting on reports of fuel shortages in major cities in East Java and Bali over the past few days.

He blamed the fuel shortage, which is affecting in particular Pertamina's Premium gasoline, on repair works at the Balongan refinery. The refinery supplies East Java and Bali with some 4 million liters of gasoline per day.

Because of the repair works, he said, the national production capacity had shrank by 10 percent.

"There is no need to calculate the ups and downs of importing the fuel now, as long as we can meet domestic demands," he said.

Bambang estimated that the Balongan refinery would resume operations by July 21.

But he added that it would take about three days for the Balongan refinery, which uses High Octane Mogas Crude (HOMC) from Kuwait in its gasoline production, to return to its normal level of production.

Bambang also attributed the current shortages to the fire at Kuwait's Al Achmadi refinery, which supplied HOMC crude to Balongan.

"In times of crisis, we usually ask for some of Singapore's supply, but this time their supply has ran out to meet demands on America's east and west coasts," he explained.

Because of this, he said, fuel from the Cilacap refinery had been used to meet demand in Western Indonesia instead of Central and East Indonesia.

"Consequently, several cities are experiencing a shortage of Premium gasoline," Bambang said.

He said that people in Bali had panicked and bought up gasoline stocks, fearing a complete dry up.

"There is also information that some people have stockpiled the gasoline to sell it to foreign buyers," Bambang said.

He was referring to subsidized fuel that attracts smugglers.

Pertamina distribution director Harry Poernomo said that despite competing demands from the United States, Pertamina was planning to import gasoline directly from Malaysia, Singapore or China.

"If we cannot handle the shortages while imports from Kuwait remain disrupted, other provinces in Sumatra will also face a shortage in gasoline," he warned.

He said that the incident had prompted Pertamina to reduce its gasoline buffer stock to 18 days from the normal 23 days.

"The only way to secure domestic supply is not to buy up the fuel in the market," he explained.

Harry stuck a more cautious note when he was asked when he expected the Balongan refinery to start pumping again, saying it could be July 26 at the earliest. (bkm/prb)