Govt pessimistic to maintain subsidized fuel consumption below quota

Energy and Mineral Resources Minister Jero Wacik predicted that the consumption of subsidized fuels would exceed the quota of 37.5 million kiloliters (Kl) in 2012, considering the pace of car and motorcycle sales last year.

"In 2011, 7 million new motorcycles and more than 800,000 cars were sold," he told the House of Representatives’ Commission VII overseeing energy during a hearing on Monday in Jakarta.

The government's earlier estimates showed that in 2012, the consumption of subsidized fuels would hit 43.7 million Kl, he explained. If the government banned private cars from buying subsidized fuels starting April in Java and Bali, the consumption could be reduced by 5.8 million Kl, he added.

The consumption could be further reduced by 180,000 Kl if 44,000 public transportation vehicles are converted to use compressed natural gas (CNG). The government can further reduce consumption by 230,000 Kl if 250,000 private cars and public transportation vehicles are converted to liquefied gas for vehicle (LGV).

If the ban and conversion programs are be implemented, the government could cut the subsidized fuels consumption by 6.21 million KL.

"Using that calculation, if the programs can all be conducted, consumption could be reduced from 43.7 million Kl to 37.49 million Kl in 2012 alone," Jero said.

The 2012 state budget set the quota of subsidized fuels at 40 million Kl. However, a reserve of 2.5 million Kl can only be used if consumption surpasses 37.5 million Kl. If consumption remains below 37.5 million Kl, the funds allocated to subsidize the remaining 2.5 million Kl would be shifted for development projects.