Susilo orders monitoring of fuel supplies
Rendi A. Witular, The Jakarta Post, Jakarta
In an effort to limit the effects of the recent fuel price hikes, President Susilo Bambang Yudhoyono issued an instruction to all state officials to supervise and monitor fuel distribution and the prices of staple foodstuffs.
Presidential Instruction No. 3/2005 also contains measures to ensure affordable public transportation fares and that the assistance funds derived from the reduction in fuel subsidy spending reach their intended targets.
"The instruction will be implemented by state officeholders, including ministers, governors, regents and mayors. The President has warned them that they will face sanctions should they fail to comply with the instruction," Cabinet Secretary Sudi Silalahi told a press conference on Thursday.
He said the sanctions would range from administrative penalties -- such as a reduction in rank and dismissal -- to legal proceedings if there was prima facie proof that the officeholders had violated the Criminal Code while implementing the instruction.
The government has allocated a total of Rp 17.8 trillion (US$1.92 billion) to finance a number of programs targeted directly at the poor. The programs include scholarships, the purchase of subsidized rice for the poor, rural infrastructure projects and health programs.
Some Rp 10.5 trillion out of the Rp 17.8 trillion would be taken from the savings on fuel subsidy spending after the government increased fuel prices by an average of 29 percent.
Sudi said the instruction also covered the need to ensure fuel supply stability nationwide and prevent any disruptions in fuel distribution due to speculation, smuggling and adulteration by unscrupulous distributors.
"The government will prevent leakages in the fuel distribution chain and watch for underhand practices, such as hoarding and the adulteration of fuel by other substances," said the Minister of Energy and Mineral Resources Purnomo Yusgiantoro.
He said there had been a 19 percent increase in fuel consumption over the past two months due to speculation ahead of the price increases.
Purnomo also expressed fears that the big differences between the prices of kerosene and other types of fuel would encourage distributors to mix gasoline and diesel fuel with kerosene and sell it at the market price to make bigger profits.
"For the immediate future, (state oil and gas company) Pertamina is expected to sell kerosene to retail consumers in small bottles to prevent distributors from buying large volumes for subsequent adulteration," he said.
The kerosene price has been maintained by the government at Rp 700 per liter, while gasoline is now sold at Rp 2,400 per liter, up from Rp 1,810 before the March 1 hike, and automotive diesel fuel at Rp 2,100, up from Rp 1,650 previously.