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Pertamina may borrow US$250m for subsidized fuel
State oil and gas firm PT Pertamina may use a US$250 million standby loan facility provided by 18 banks if subsidized fuel consumption exceeds this year’s quota
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tate oil and gas firm PT Pertamina may use a US$250 million standby loan facility provided by 18 banks if subsidized fuel consumption exceeds this year’s quota.
“We may possibly resort to using the loans if, for example, subsidized fuel consumption exceeds the
regulated quota,” Pertamina finance director M. Afdal Bahaudin said Friday.
The revised 2010 state budget has capped this year’s subsidized-fuel consumption at 36.5 million kiloliters. But Afdal said the actual consumption might exceed the regulated volume.
“Based on our estimates, the consumption could reach around 40 million kiloliters. If this happens, we will use the standby loans,” he said.
On July 31 last year, Pertamina secured Rp 3 trillion and $400 million in loans from 18 domestic and foreign banks.
Apart from the loans, the banks would also provide Pertamina with a total of US$250 million in standby loans that could be used by the company any time it needed extra cash.
The rupiah-denominated loans were provided by BNI, BRI, BCA and Bank Mandiri, while the dollar-denominated loans was provided by Citibank, PT ANZ Panin Bank, Bank of Tokyo-Mitsubishi UFJ, BNP Paribas, BRI, Sumitomo Mitsui Banking Corporation, BCA, OCBC, PT Bank Mizuho Indonesia, PT Bank Pan Indonesia Tbk, HSBC, Chinatrust Commercial Bank Co. Ltd., Calyon, CIMB Bank Berhad, Natixis and Qatar National Bank SAQ.
Pertamina received the standby loan facilities as the loan proposal was oversubscribed. Pertamina officials say the company was initially only looking for $300 million and Rp 3 trillion in loans, but it was
offered $650 million and Rp 4.5 trillion.
The company finally decided to accept $400 million and Rp 3 trillion in loans with a maturity of 3 years. The remaining $250 million is maintained as standby loans.
Afdal said the loans would be necessary because Pertamina would need funds to pay for the fuel
before the government reimbursed expenses.
“We will only take the standby loans if the loans’ terms and conditions are the same as in the past. Taking the standby loans will be more effective than seeking new loans,” he said.
The subsidized fuel Pertamina distributes include kerosene, premium gasoline and diesel. The company also distributes subsidized LPG in 3-kilogram canisters that have hit headlines recently following a string of canister explosions.
Pertamina president director Karen Agustiawan blamed the explosions on the illegal filling of LPG from the subsidized 3-kilogram canister into non-subsidized 12-kilogram canisters in a bid to cash in on the difference. The illegal practice is done by agents seeking higher profits.
“This is caused by the price disparity [between the 12-kilogram and the 3-kilogram canisters],”
Karen said.
To shore up the gap, she added, the government could either subsidize LPG sold in the 12-kilogram canisters or replace the subsidy on the LPG sold in the 3-kilogram canisters with direct cash aid to low-income customers.
