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ownstream oil and gas regulator BPH Migas reported Monday that between 10 and 15 percent of the subsidized fuel distributed by the government was illegally sold to industries.

BPH Migas committee member Adi Subagyo said the growing price disparity between subsidized and non-subsidized fuel caused distortions, particularly at gas stations located near industrial and mining areas.

“Illegal activities have increased recently. Almost every day BPH Migas members are summoned by police to give expert opinions on the illegal sale of subsidized fuel,” he said via telephone.

Unlike the general public and public transportation firms, businesses are not allowed to buy subsidized fuel to support commercial activities.

The agency announced earlier that the consumption of subsidized fuel in the first four months of 2011 topped 12.9 million kiloliters, exceeding the 12.3-million-kiloliter quota by 5.3 percent.

BPH Migas earlier partly blamed the increase in the use of subsidized fuel on the many motorists who switched from using non-subsidized fuel to subsidized fuel because of the surge in prices.

Currently, the price of non-subsidized gasoline is Rp 9,500 (US$1.10) per liter, more than twice the price of subsidized gasoline at Rp 4,500 per liter.

The government earlier planned to limit the sale of subsidized fuel to private vehicle owners in April this year to help slash the budget deficit. However, the decision was later delayed amid fears that lifting the subsidy would trigger social unrest.

Finance Minister Agus Martowardojo said Monday the delay was not indefinite, adding that the Energy and Mineral Resources Ministry was preparing the most effective way to reduce the sale of subsidized gasoline.

The Energy and Mineral Resources Ministry will conduct a trial of its plan in July through the use of radio frequency identification (RFID) networks at several selected gas stations, ministry director general of oil and gas Evita Legowo said last week.

Under the system, gas station attendants will have information on how much subsidized fuel any vehicle had consumed and how much more the vehicle owner was allowed to purchase.

“The data will be important in determining future policies. This is just a trial, not an attempt to limit the sale of subsidized fuel because the policy has not yet been decided,” Evita said.

The acting chief of the Finance Ministry’s fiscal policy office, Bambang Brodjonegoro, said the government would resume talks on limiting the sale of subsidized fuel and come up with a decision after the trial in July.

The government and the House of Representatives’ Commission VII overseeing energy affairs in April delayed the plan to stop the sale of subsidized gasoline to private vehicle owners, a move that could cost the government Rp 6 trillion in more subsidies and add Rp 13 trillion to Rp 17 trillion to the budget deficit as global oil prices soar.

Indonesia allocated Rp 95.9 trillion to subsidize fuel this year, an amount that local and international observers, including the International Monetary Fund and World Bank, consider too high as they claim the funds would be better used for infrastructure development or for health and education.