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Jakarta Post

Govt to issue regulation allowing distribution of subsidized fuel exceeding quota

  • The Jakarta Post

    The Jakarta Post

Jakarta   /   Mon, December 15, 2014   /  04:51 pm

The government will issue a regulation that allows state oil and gas firm PT Pertamina (Persero) to distribute subsidized fuel exceeding the amount established by the state budget (APBN).

'€œIf the subsidized-fuel quota is not enough, then there will be an order letter for Pertamina to keep distributing subsidized fuel until Dec. 31, 2014,'€ said Naryanto Wagimin, acting director general of oil and gas at the Energy and Mineral Resources Ministry, as quoted by Antara news agency in Jakarta on Monday.

However, he added, Pertamina remained optimistic that the fuel consumption would not exceed the quota of 46 million kiloliters (kl) set by the revised state budget (APBN-P).

Naryanto went on to say that the government would discuss increasing the quota with the House of Representatives if consumption exceeded it.

The ministry has scheduled a work meeting on Wednesday with the House'€™s Commission VII, which oversees energy.

'€œIt is possible for us to discuss the fuel quota during the meeting,'€ said Naryanto.

Praising the plan, energy expert Komaidi Notonegoro said the government needed to issue a regulation increasing the quota of subsidized fuel.

'€œThen Pertamina [would have] quite a strong legal basis [for providing subsidized fuels exceeding the amount set aside],'€ he said, adding that the legal basis would protect Pertamina from prosecution.

Komaidi, who is also ReforMiner Institute deputy executive director, added that the government did not need to seek approval from or consult with the House on matters related to increasing the subsidized-fuel quota.

'€œ[The subsidized-fuel] quota set in the APBN is on a nominal rupiah and not [based] on volume,'€ he said. Thus, he added, as long as the value of subsidized fuel did not exceed APBN assumptions, the government did not need to ask for approval for raising the quota from the House.

In 2014, Pertamina received a fuel quota of 45.36 million kl. However, the company predicts that by the end of the year, consumption will exceed the quota by 1.3 million kl.

However, another oil and gas distributor, PT AKP Corporindo, received a subsidized-fuel quota of 640,000 kl. Due to infrastructure struggles, however, AKR will be unable to distribute some 300,000 kl.

Thus, in total, subsidized-fuel consumption will likely surpass the quota of 46 million kl set by the APBN by about 1 million kl. (ebf)(++++)

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