Pertamina expects fuel subsidies to cost Rp 2t next year
The Jakarta Post, Jakarta | Wed, 12/24/2008 5:52 PM
The State-owned oil company, PT Pertamina, expects to lose up to Rp 2 trillion (US$ 166 million) next year from the distribution of subsidized fuels to the public,
kompas.com reports.
The losses would be caused by the "alpha percentage" (margin between distribution costs and profit) which has been set by the government at 8 percent, assuming global oil prices of $50 per barrel and a rupiah value of Rp 11,000 to the U.S. dollar, Pertamina president director Ari Soemarno said Wednesday.
Pertamina has asked the Finance Ministry and State Ministry for State Enterprises to increase the alpha percentage to at least 12.5 percent -- the minimum it needs to break even, Ari said.
In 2008, the distribution business contributed Rp 4 trillion in net profits to Pertamina, with skyrocketing fuel prices around the world exceeding $100 per barrel a few months ago. (ewd)
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