Rise in premix gasoline price being calculated

JAKARTA (JP): The Premix Producers and Distributors Association is in the process of determining a "rational and objective" price increase for premix gasoline, which they said has been unchanged for the past three years.

"Among the several objective reasons we have is the large portion of imported chemicals for premix, whose prices always fluctuate depending on the U.S. dollar rate and our country's inflation rate," Karim Kono, a representative of the association, said yesterday.

Speaking to reporters after delivering a speech to businessmen at a one-day talk on premix, Karim, however, refused to reveal the estimated rate of increase.

"We're just calculating the possible increase," he said. He refused to answer a question on whether the association had submitted the increase plan to the government.

So far, there are only five companies which have received permission from the government to produce and distribute premix to hundreds of gas stations all over the country.

The firms are PT Humpuss Trading, PT Elnusa, PT Giga Intrax, PT Sinar Pedoman Abadi and PT Panutan Selaras.

The higher the content of octane in the blending, the longer the life of the vehicles' engines, said the producers.

According to Karim, an executive of Sinar Pedoman Abadi, the latest increase in the premix price took place three years ago when the price was set at Rp 825 per liter.

Many believe the price of premix will be raised another Rp 50 per liter.

The price of premix is more expensive than regular gasoline because of its higher octane content.

In the capital, which has 153 gas stations, premix is currently sold at between Rp 870 and Rp 875 per liter while regular gasoline, labeled as premium, sells at Rp 700 per liter.

PT Elnusa, supervised by the government, sets the price of its premix gasoline Rp 5 lower than the other privately owned companies.

When the new gasoline was introduced here in 1992, Elnusa sold its premix Rp 10 higher than the government-set rate of Rp 710.

According to Karim, all five companies have an installed production capacity of 40,000 kiloliters per month.

"In the meantime, we only produce around 30,000 kiloliters per month, as required by the market," he said.

In his speech, Karim said the association continues to find a number of parties in gasoline business circles who are cheating customers and retailers.

"For instance, the volume of premix carried in tanker trucks was reduced before the trucks arrived at the gas stations," he told reporters later.

"Sometimes they even mixed the gasoline with kerosene in order to get more money," he added.

Also, some gas station operators cheated their customers by "playing with" the meter, he said.

"That's why, we call on the government and the state-oil company Pertamina to ensure more frequent and routine checking of gas stations to improve the image of premix among consumers," said Karim, who has been in the business since the gasoline was introduced here.

Pertamina is recommending that all gas stations obtain their permission before beginning operation. (bsr)