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Premium consumption continues to decline

State-owned oil and gas giant Pertamina has reported that the consumption of its Premium brand gasoline continues to drop significantly, attributing the trend to the increasing public awareness of the importance of better quality fuels

Fedina S. Sundaryani and Grace D. Amianti (The Jakarta Post)
Jakarta
Sat, October 1, 2016

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Premium consumption continues to decline

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tate-owned oil and gas giant Pertamina has reported that the consumption of its Premium brand gasoline continues to drop significantly, attributing the trend to the increasing public awareness of the importance of better quality fuels.

Pertamina data shows that the average sales of Premium, which has a research octane number (RON) of 88, dropped to 50,500 kiloliters per day in September from 64,600 kiloliters per day in July.

Pertamina spokesperson Wianda Pusponegoro noted that Premium sales had been even higher earlier this year at around 75,000 kiloliters a day, but had dropped in correlation to the increased sales of its non-subsidized fuel counterpart, Pertalite, which has a RON of 90.

Pertalite’s sales have surged since it was introduced last year. The oil and gas giant recorded that Pertalite sales reached 25,200 kiloliters per day this month from 14,700 kiloliters in July. Sales of the non-subsidized fuel only reached a measly average of 327 kiloliters per day when it first hit the market.

“The public’s enthusiasm has been very high, especially since more are becoming aware of the types of fuels better suited to their cars. Nowadays, most car compression engines have a compression level above nine, which needs fuel with a RON higher than 88,” Wianda told reporters on Thursday.

The growing public interest to Pertalite, Wianda continued, might also have been caused by the increasing number of gas stations selling the new product. Up to 4,341 of the total of 5,806 gas stations nationwide now sell Pertalite, with up to 47 of them located in Papua and West Papua.

The average sales of Dexlite, a new diesel fuel brand Pertamina hopes will replace the subsidized Solar diesel fuel, has increased to 620 kiloliters per day in September from 230 kiloliters in July.

Indonesia still lags behind by its neighbor Malaysia in terms of the distribution of high octane fuel. Malaysia removed fuel with a RON lower than 91 in 2009 and now its people regularly consume fuel with a RON of 95. In contrast, 87 percent of distributed fuel in Indonesia has a RON of 88.

However, both the government and Pertamina hope to change that as many gas stations have started to phase out their Premium stocks.

Furthermore, Pertamina is currently building several new refineries and upgrading existing refineries so that they can produce fuel with higher RON specifications, including the RON-92 Pertamax gasoline, which has also seen a rise in popularity.

As Premium’s popularity continues to wane, the government has decided to tweak the prices of both subsidized fuels following three months of no change.

The government last changed subsidized fuel prices in April when it set Premium gasoline at Rp 6,450 (50 US cents) per liter and Solar at Rp 5,150 per liter. It decided to maintain the prices for the next three months after the following evaluation in July because of the Ramadhan and Idul Fitri festivities.

The Energy and Mineral Resources Ministry recently announced that Premium prices would decrease by around Rp 300 per liter, while Solar prices will increase by around Rp 500 to Rp 600 per liter starting this month.

However, the Ministry’s secretary-general, Teguh Pamudji, told reporters on Friday that the government had decided to maintain the subsidized fuel prices until the end of the year.

He explained that the decision was made based on economic reasons, but declined to disclose any details.

Separately, Pertamina Retail, the subsidiary of Pertamina that manages gas stations, said that it had gradually lowered Premium stocks at its outlets in response to declining demand for the fuel brand.

“The demand for Premium is getting weaker,” Pertamina Retail president director Toharso said on Friday.
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Moses Ompusunggu contributed to the story.

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