Panic buying follows govt plan to hike fuel prices

Ika Krismantari ,  The Jakarta Post ,  Jakarta   |  Sat, 05/10/2008 10:34 AM  |  Headlines

State oil and gas company PT Pertamina is struggling to control the distribution of subsidized fuels as panic buying has followed the government's announcement of a plan to raise fuel prices.

The buying was exacerbated by illegal hoardings which caused scarcity in fuel supply, said a Pertamina official.

"People have prepared for the plan by buying gasoline in quantity, more than usual. We are trying our best to control this situation," Pertamina deputy director for marketing Hanung Budya said Friday.

Hanung cited the volume of daily gasoline sales in Semarang, Central Java, which rose 15 percent per day to 57,500 kiloliters during the first week of May, due mostly to buying spurred on by the fuel increase plan.

He added that in some other areas in Java, Sumatra and Nanggroe Aceh Darusallam sales had risen by an average of 7 percent.

Pertamina spokesman Wisnuntoro said illegal hoarding was also on the rise.

"We cannot control the demand but we will tighten the distribution mechanism. We will make sure gas stations only sell products to motorized vehicles, while industries will be required to show a special permit for every purchase," Wisnuntoro said.

Police officers were seen guarding gas stations Friday in some parts of the country, including Bandung, West Java; Yogyakarta, Central Java; Kupang, East Nusa Tenggara; and Kendari, Southeast Sulawesi.

This year's fuel consumption is set at 35.5 million kl.

The state budget allocation for fuel subsidies is set at Rp 126.8 trillion (US$13.7 billion), or 12 percent of the government's total expenditure in 2008.

The government last week announced the plan to raise fuel prices in June.

The government said it would also start limiting the sales of subsidized fuels by distributing a control card, known as a "smart card", to motorists by September.

The program will be introduced in Jakarta and then to other regions in West Java, Central Java, East Java and Bali.

In North Jakarta, harbor police found nine cases of illicit activities from April 29 to May 6 where subsidized fuels were sold to industries.

Head of the police's criminal division Adj. Comr. M. Iqbal said Friday officers had found three companies that repeatedly bought the fuel. He declined to disclose the companies' names.

Last month, police arrested an employee of PT Excelcomindo Pratama, the third-biggest telecommunications operator in the country, for allegedly buying subsidized diesel from a cooperative in Tangerang, West Java. (ind)

Copyright © 2008 The Jakarta Post - PT Bina Media Tenggara. All Rights Reserved.