Pertamina ready to execute fuel sale restriction plan

Despite uncertainty over the future of the government’s plan to limit the distribution of subsidized fuels, state oil and gas firm PT Pertamina says that it is ready to implement the policy whenever it is approved.

In Java and Bali, in order to implement the policy, all fuel stations need to have tanks with total capacity of 342,000 kiloliters (KL) to store more non-subsidized fuels, company spokesperson Mochamad Harun reported. Total installed capacity is currently 300,000 KL.

“The capacity of mobile tanks carrying non-subsidized fuels should also be ramped up from the current 1,565 KL to 10,530 KL. We can do that by converting subsidized fuel tanks to accommodate non-subsidized fuels. We can clean the tanks and refill them with non-subsidized fuels,” he told reporters at a press conference at his office in Jakarta on Friday.

According to Pertamina data, from 4,665 fuel stations across the country (except in Maluku, Nusa Tenggara and Papua), 2,680 stations have sold non-subsidized fuels, 1,337 stations only need to convert the use of tanks from storing subsidized fuels to non-subsidized fuels and 648 stations have to install new tanks.

The total investment required to add the tanks is estimated to be Rp 255 billion (US$28.2 million), or Rp 393 million per station.

The government plans to begin the limitation of subsidized fuel sales to private cars in April next year. The policy will be implemented first in Java and Bali. The House of Representatives has also reduced the quota of subsidized fuels to 40 million KL for 2012 from 40.49 million KL this year. The plan was rejected by the House last year due to insufficient data and lack of infrastructure preparation.

Harun revealed that in Java and Bali, the amount of stations selling non-subsidized fuels reached 3,067. As many as 2,065 stations have sold non-subsidized fuels, 700 stations have to switch the tanks from storing non-subsidized fuels to subsidized fuels and 296 stations require new investments.

In Sumatra, of 1,037 fuel stations, only 351 have sold non-subsidized fuels, 470 stations have to change the use of their tanks from storing subsidized to non-subsidized fuels and 216 stations need new investments. In Kalimantan and Sulawesi, of 567 stations, only 264 sell non-subsidized fuels.

Pertamina would not provide financial assistance for gas station owners to add new infrastructure, Harun said. However, the company would try to provide bank loans with low interest rates for the owners.

The director general for oil and gas at the Energy and Mineral Resources Ministry, Evita Herawati Legowo, revealed that her ministry hoped the revision of the 2006 presidential regulation on fuel prices in January would pave the way for the limitation policy.

After the revision is signed by President Susilo Bambang Yudhoyono, the government will propose its policy model to the House.

Evita, however, declined to reveal the content of the revision or the proposed policy model.

“We are finalizing the preparations now,” she said.