P

eople will likely find it harder next year to find subsidized fuel as availability will decline due to the expectation of a lower quota for the much needed fuel.

The House of Representatives Commission VII overseeing the energy sector demanded that the subsidized fuel quota be set at a range of 46 to 47 million kiloliters (kl) next year, lower than the government'€™s proposal of 48 million kl.

The lower quota was based on the intention of reducing the energy sector subsidy that had burdened the state budget, Commission VII head Milton Pakpahan said.

The government has been struggling to keep its budget tight, particularly with the rising energy subsidy. This year, the subsidized fuel quota has been capped at 46 million kl with a subsidy value of Rp 246.5 trillion (US$20.6 billion).

In the earlier proposed 2015 state budget, in which the subsidized fuel quota was set at 48 million kl, the government planned to spend Rp 291.1 trillion in subsidy, or Rp 44.6 trillion higher than this year'€™s spending plan.

Deputy Energy and Mineral Resources Minister Susilo Siswoutomo said that the 48 million kl was based on an estimated rise in consumption, which is particularly driven by the increased sales of two and four-wheeled vehicles.

'€œA drastic quota decline will only happen if there is an increase in prices and subsidized fuel consumption is restricted,'€ Susilo said.

State-owned oil and gas giant PT Pertamina, which is also the biggest distributor of subsidized fuel, recently decided to limit the distribution of subsidized fuel as part of its attempt to maintain deliveries within the quota of 46 million kl.

However, the decision was withdrawn following public outcry. It is estimated that the country will run out of subsidized fuel in November or December.

As of the end of August, Pertamina has distributed 30.88 million kl of subsidized fuel, consisting of 19.74 million kl of gasoline, 10.52 million kl of diesel fuel and 619,239 kl of kerosene.

Given the growing number of two- and four-wheeled vehicles, the state company estimates that next year'€™s demand for subsidized fuel will stand at 48.8 million kl, consisting of 30.6 million kl for gasoline, 16.55 million kl for diesel fuel and 850,000 kl for kerosene.

Therefore, capping subsidized fuel at 46 to 47 million kl will prove to be hard work for the government.

'€œWe cannot cut the volume of kerosene. What we can do is lower gasoline and diesel fuel, perhaps, equally. We will need a different policy to control subsidized fuel,'€ Pertamina'€™s senior vice president for fuel retail and marketing, Suhartoko, said.

Downstream Oil and Gas Regulatory Agency (BPH Migas) head Andy Sommeng said the 47 million kl subsidized fuel cap was not realistic.

'€œWe cannot resist growth. In case there is a price increase, the assumption of 46-47 million kl makes sense as there will be a high disparity in price. However, we have to pay attention to the misusage of subsidized fuel due to the disparity,'€ Andy said.