I

ndonesia will consume more subsidized gasoline this year than the quota planned by the government, thanks to a price disparity between fuel products and strong car and motorcycle sales.

Energy and Mineral Resources Minister Jero Wacik said on Wednesday the year-end consumption of 88-octane gasoline, commonly known as Premium, would likely exceed the allocation by 9 percent.

The subsidized fuel is available only at state oil and gas firm PT Pertamina'€™s gas stations.

'€œThis has happened because of the increasing number of vehicles by 11 percent compared to last year,'€ he said in Jakarta.

The number of new car and motorcycle sales reached 1.1 million and 7.1 million respectively,
every year, according to the government'€™s data.

According to Jero, the consumption of the subsidized fuel reached 9.48 million kiloliters, or 63 percent of the total quota already, as of April this year.

In addition, he said, the consumption of diesel fuel amounted to 5.06 million kiloliters and kerosene 0.37 million kiloliters, also in the same period. Both diesel and kerosene are also subsidized.

In the government'€™s proposal of the revised 2013 state budget, it allocated Rp 209.9 trillion for fuel subsidies, 8 percent higher than the Rp 193.8 trillion it allocated in the original state budget.

But Jero said the government had proposed increasing the quotas of subsidized fuel types from 46.01 million kiloliters stipulated in the 2013 state budget to 48 million kiloliters in the proposal of the revised state budget.

The proposed new quotas of subsidized fuel include Premium and bio-ethanol at 30.77 million kiloliters, diesel and bio-diesel at 16.03 million kiloliters and kerosene at 1.2 million kiloliters.

Jero said the government hoped the additional quotas would be sufficient as it would start increasing subsidized fuel prices next month from Rp 4,500 a liter (46 US cents), the cheapest fuel price in Southeast Asia, to Rp 6,500 for Premium and Rp 5,500 for diesel.

Many motorists prefer subsidized fuel to non-subsidized due to the price disparity. Non-subsidized fuel is sold at around Rp 9,500 a liter.

Motorists are expected to consume less fuel with subsidized fuel sold at higher prices.

Indonesia, which resigned from the Organization of the Petroleum Exporting Countries (OPEC) in 2008 after becoming a net oil importer, imports both crude oil and its refined products to meet the daily fuel consumption of 1.3 million barrels.

Separately, Democratic Party politician Sutan Bathoegana, who chairs the House of Representatives Commission VII overseeing energy, said lawmakers would push the government to increase its monitoring to prevent the over-consumption of fuel.

'€œIn addition, Pertamina and BPH Migas [the downstream oil and gas regulator] must also increase their performance to overcome this unending problem,'€ he said.

Last year, the total consumption of subsidized fuel stood at 45.27 million kiloliters, 8 percent higher than the 2011 consumption level of 41.7 million kiloliters. The government initially assigned funds for 40 million kiloliters of subsidized fuel last year.