90,000 govt vehicles to get stickers for fuel ban

The government says it has set an August deadline to issue 90,000 stickers for government cars banned from buying subsidized fuel in Java and Bali.

Around 20,000 stickers, which indicate the vehicles cannot use subsided fuel, have been distributed for government cars in Greater Jakarta, and an additional 40,000 would be issued by the end of August, Evita Herawati Legowo, the Energy and Mineral Resources Ministry’s oil and gas chief, said.

“Regional administrations can also create their own stickers, as in West Java. It’s allowed. The most important thing is that they follow President Susilo Bambang Yudhoyono’s directions,” she told reporters on the sidelines of the launch of “The Oil and Gas Year” report series at the ministry in Jakarta.

On sanctions for subsidy scofflaws, Eva said that individual state agencies would be responsible for setting right civil servants using subsidized fuel for official vehicles.

“Energy and Mineral Resources Minister [Jero Wacik] has ordered all secretaries-general and regional secretaries to strictly supervise the implementation of the 2012 ministerial regulation on fuel restrictions,” Evita said. The regulation also includes a ban on subsidized-fuel use for mining and plantation vehicles.

Eva said that the stickers were only one way to impose the ban and that she expected all civil servants to be aware of the regulation and all state institutions to monitor compliance.

Jero previously estimated that the implementation of the ban for vehicles operated by the government, state-owned enterprises and regional enterprises would cut the nation’s annual subsidized-fuel consumption by 135,000 kiloliters (KL).

For mining and plantation companies, the ban will go into effect in September. The government intends to distribute stickers to mining and plantation companies across the nation to implement the regulation.

The companies have given three months from June, when the ban for government cars came into force, to prepare the infrastructure needed to obtain non-subsidized fuel for their operations, Evita said.

“If they violate the regulation and still buy subsidized fuel at gas stations, there will be legal punishment. We’ll inform all companies to ensure they understand and are willing to follow the ministerial regulation,” she said.

The supervision of compliance for mining and plantation companies would be conducted by downstream oil and gas regulator BPH Migas in cooperation with the National Police, she added.

The government has targeted reducing subsidized fuel use by 425,000 kiloliters a year by extending the ban to cover industrial vehicles, especially those operated mining companies and plantations.

In addition to banning subsidized fuel use for government and industrial vehicles, the government will also accelerate its oil-fuel-to-gas conversion program. This year, the conversion program is expected to decrease subsidized fuel consumption by 8,000 kiloliters.

An energy expert from ReforMiner Institute, Pri Agung Rakhmanto, disagreed with Eva, saying that the ban would not significantly reduce subsidized fuel consumption, even for government vehicles, as there had been no clear written instructions or technical guidance to implement it.

“The policy will still be prone to violations because subsidized fuels still exist in the market and the price disparity between non-subsidized fuel is very large,” he told The Jakarta Post.

On including mining and plantation vehicles, Rakhmanto said he doubted that would be effective, since a regulation detailing sanctions for the violators had not been issued to back the policy.