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Pertamina required to sell Premium in three regions
The government plans to oblige state-owned oil and gas firm Pertamina to sell its low-grade Premium brand of RON88 gasoline in Java, Madura and Bali in order to fully implement its policy to apply a uniform fuel price nationwide this year
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span>The government plans to oblige state-owned oil and gas firm Pertamina to sell its low-grade Premium brand of RON88 gasoline in Java, Madura and Bali in order to fully implement its policy to apply a uniform fuel price nationwide this year.
Presidential Regulation (Perpres) No. 191/2014 regulates gasoline intended for combustion engines and public use, including Premium, Pertamax (RON92) and Pertalite (RON90).
Currently, it is not mandatory for Pertamina to supply the aforementioned regions with Premium as part of its public service obligation (PSO), which states that the company must fulfill the public’s demand for fuel, regardless of location.
In the current arrangement, Premium sold in Java, Madura and Bali is Rp 100 (1 US cent) higher than in other regions.
The Energy and Mineral Resources Ministry has confirmed that it would revise the 2014 presidential regulation to make Premium gasoline more accessible to Java, Madura and Bali residents.
The ministry’s oil and gas director general, IGN Wiratmaja Puja, said that the amendment would be in line with President Joko “Jokowi” Widodo’s goal to ensure that Pertamina’s PSO will include providing Premium at the same price across the nation.
“There should be a single price [for fuel] and this is why we have proposed that Perpres No. 191 be revised. This is still under discussion,” he said on the sidelines of a recent meeting at the House of Representatives.
The Jokowi administration has repeatedly expressed its commitment to applying a uniform price for RON88 and PSO diesel fuel gasoline, locally known as Solar.
It has, for instance, slashed the price of Premium and Solar in Papua and West Papua from the skyrocketing levels of Rp 50,000 and Rp 100,000 per liter, respectively, to Rp 6,450 and Rp 5,150.
Tasked with cutting high prices, largely caused by a lack of infrastructure and high distribution costs, Pertamina has build additional gas stations in 150 areas and will develop 22 mini gas stations in 14 provinces across the sprawling archipelago by the end of this year.
Despite the government’s intention to improve access to the PSO fuel, Premium consumption has continued to decline throughout the years, data from Pertamina shows.
By the end of 2016, Premium made up 53 percent of its total fuel sales, compared to 86.8 percent in the previous year.
In the country’s capital, for instance, sales of Premium reportedly has followed a downward trend as the city residents prefer other types of gasoline.
Pertamina marketing director M. Iskandar said that while the official data was being verified, consumption of non-PSO fuel Pertamax in the first half of this year is predicted to climb 33.4 percent from the same period last year.
Pertamax made up 20 percent of total consumption in 2016.
Moreover, consumption of Pertalite jumped 27 percent by the end of last year, from 4.2 percent in the previous year.
“The public has started to be more aware of better quality [fuel],” Iskandar said.
Data from the Downstream Oil and Gas Regulatory Agency (BPH Migas) reveals that 1,094 gas stations, or 34.75 percent, of the total 5,480 nationwide do not supply Premium gasoline.
It also shows that 294 out of the 1,094 gas stations are located outside the Java, Madura and Bali regions, where it is actually compulsory for them to sell the type of fuel.
