Pertamina puts limits on fuel purchases

Ika Krismantari ,  The Jakarta Post ,  Jakarta   |  Sat, 05/17/2008 11:16 AM  |  Headlines

State oil and gas company PT Pertamina has put limits on fuel transactions at gas stations in Jakarta and several other cities in the country, in response to panic buying triggered by the government's plan to raise fuel prices.

According to a letter distributed to gas stations in Jakarta, Pertamina, starting Friday, will limit gasoline purchases for private cars to Rp 65,000 (US$7.06), public transportation vehicles Rp 100,000 and motorcycles Rp 15,000.

The letter states that similar limits apply for the purchase of diesel fuel. It is signed by Wahyudin Akbar, the general manager of Pertamina for fuel retail marketing in Jakarta and West Java.

Djaelani Sutomo, Pertamina vice president for fuel retail marketing, confirmed the measure, saying a similar letter was distributed to gas stations in other areas known to be prone to excessive fuel consumption, such as many cities in Kalimantan and Java.

He did not name specific cities.

"We are doing this to control consumption, which has jumped significantly since the government announced its plan to raise domestic fuel prices," he said.

The government's announcement was greeted by panic buying, with customers buying fuels in large amounts in many parts of the country, pushing up fuel consumption by an average of 15 percent over the past two weeks.

In East Java, consumption has grown by 40 percent in the last two weeks, in Sumatra by 15 percent and in Jakarta by 5 to 15 percent.

There has also been an increase in fuel smuggling and hoarding, triggered by the huge gap between the market and subsidized prices for fuel.

Asked when Pertamina would lift the purchase limits, Djaelani they might not be removed.

"We want to make sure that we meet the national quota of 35.5 million kiloliters (kl) set for this year," Djaelani said.

Earlier in the day, Pertamina president director Ari Sumarno told a press briefing every gas station in Jakarta would be given an additional fuel supply of 5 percent in response to rising public demand.

"The policy is taken with a consideration that after the fuel hike, demand will decline," he said.

The 35.5 million kiloliter allocation comprises 16.9 million kiloliters of gasoline, 10.9 million kl of diesel fuel and 7.5 million kl of kerosene.

In the 2008 budget, the government has allocated fuel subsidy spending of Rp 126.8 trillion, or about 12 percent of the government's total expenditures.

Aside from raising fuel prices, the government also plans to limit the purchase of subsidized fuels through the so-called Smart Card program, to be put into place sometime in September.

Downstream oil and gas regulator BPH Migas said the plan would target private vehicles and public transportation operators.

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