Following soaring global oil prices in the first nine months of 2008, consumption of subsidized fuel exceeded the allocated quota by more than 3 million kiloliters (kl).
State oil and gas company PT Pertamina, the sole distributor of the fuel, announced recently that consumption reached 39.40 million kl last year, higher than the earmarked quota of 35.54 million kl provided for in the state budget.
The government provides subsidies for three oil-based fuels; Premium gasoline, diesel and kerosene, as well as the 3 kilogram containers of liquefied petroleum gas (LPG).
Achmad Faisal, Pertamina's director for marketing and trading, said Premium consumption reached 19.61 million kl, higher then the 16.98 million kl quota, while consumption of diesel reached 11.89 million kl which also exceeded the quota of 11.00 million kl.
Kerosene consumption reached 7.90 million kl, higher than its 7.56 million kl quota.
Pertamina said the consumption of Premium and diesel exceeded the initial quota because of the increasing numbers of vehicle users which grew around 6 percent last year.
"We predicted Premium and diesel consumption would surpass the allocated quota as happened in 2007," he said.
Faisal added the over target consumption of subsidized kerosene during 2008 was due to Pertamina's decision to halt the kerosene-to-LPG conversion program during the Islamic fasting month of Ramadan.
For 2009, the state budget has capped the subsidized fuel quota at 36.85 million kl -- 19.40 million kl for Premium, 5.80 million kl for kerosene and 11.61 million kl for diesel.
Downstream oil and gas regulator BPHMigas said it expected that actual consumption would not exceed those forecast.
"We will strengthen our supervision to avoid irregularities in subsidized fuel distribution. As the price gap between subsidized and non-subsidized fuels is narrowing, we expect to see less smuggling attempts and more use of non-subsidized fuel by motorists," BPHMigas chairman Tubagus Haryono said.
He added BPHMigas had carried out feasibility studies in several cities to establish integrated gas distribution which was expected to help reduce oil-based fuel consumption.
However, the agency has yet to implement this to promote greater energy efficiency in fuel consumption.
Tubagus said the "Smart Card" program aimed at motorists purchasing subsidized fuels was unlikely to be implemented during 2009, as the agency was still making feasibility studies.
Fuel subsidy and volume
2005 2006 2007 2008 2009*
Fuel and LPG subsidy 103.35 64.21 83.79 140.01 57.61
(in trillion rupiah)
Volume 59.75 37.46 38.67 39.40 36.85
(in million kiloliters)
*subsidy and quota stipulated in the 2009 state budget
State oil and gas company PT Pertamina, the sole distributor of the fuel, announced recently that consumption reached 39.40 million kl last year, higher than the earmarked quota of 35.54 million kl provided for in the state budget.
The government provides subsidies for three oil-based fuels; Premium gasoline, diesel and kerosene, as well as the 3 kilogram containers of liquefied petroleum gas (LPG).
Achmad Faisal, Pertamina's director for marketing and trading, said Premium consumption reached 19.61 million kl, higher then the 16.98 million kl quota, while consumption of diesel reached 11.89 million kl which also exceeded the quota of 11.00 million kl.
Kerosene consumption reached 7.90 million kl, higher than its 7.56 million kl quota.
Pertamina said the consumption of Premium and diesel exceeded the initial quota because of the increasing numbers of vehicle users which grew around 6 percent last year.
"We predicted Premium and diesel consumption would surpass the allocated quota as happened in 2007," he said.
Faisal added the over target consumption of subsidized kerosene during 2008 was due to Pertamina's decision to halt the kerosene-to-LPG conversion program during the Islamic fasting month of Ramadan.
For 2009, the state budget has capped the subsidized fuel quota at 36.85 million kl -- 19.40 million kl for Premium, 5.80 million kl for kerosene and 11.61 million kl for diesel.
Downstream oil and gas regulator BPHMigas said it expected that actual consumption would not exceed those forecast.
"We will strengthen our supervision to avoid irregularities in subsidized fuel distribution. As the price gap between subsidized and non-subsidized fuels is narrowing, we expect to see less smuggling attempts and more use of non-subsidized fuel by motorists," BPHMigas chairman Tubagus Haryono said.
He added BPHMigas had carried out feasibility studies in several cities to establish integrated gas distribution which was expected to help reduce oil-based fuel consumption.
However, the agency has yet to implement this to promote greater energy efficiency in fuel consumption.
Tubagus said the "Smart Card" program aimed at motorists purchasing subsidized fuels was unlikely to be implemented during 2009, as the agency was still making feasibility studies.
Fuel subsidy and volume
2005 2006 2007 2008 2009*
Fuel and LPG subsidy 103.35 64.21 83.79 140.01 57.61
(in trillion rupiah)
Volume 59.75 37.46 38.67 39.40 36.85
(in million kiloliters)
*subsidy and quota stipulated in the 2009 state budget
Sources: Energy and Mineral Resources Ministry and Finance Ministry, Alfian, , The Jakarta Post, , Jakarta | Sat, 01/03/2009 10:33 AM | Business
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