President Joko “Jokowi” Widodo recently signed a revised presidential regulation to require the sale of subsidized Premium-brand gasoline at state-owned energy giant Pertamina gas stations in Java, Madura and Bali
resident Joko “Jokowi” Widodo recently signed a revised presidential regulation to require the sale of subsidized Premium-brand gasoline at state-owned energy giant Pertamina gas stations in Java, Madura and Bali.
The revision of Presidential Regulation No. 191/2014 has been labeled a politically motivated move ahead of the presidential election next year.
The new rules burden state-owned energy giant Pertamina, which, as the sole distributor of the fuel, has been pressured to keep the price of Premium below market value at Rp 6,550 (47 US cents) per liter without a government subsidy. The market value of the fuel is estimated at Rp 7,350 per liter.
Premium has a research octane number (RON) of 88, the lowest among Pertamina fuel types, but it is popular because of its low price.
The move has also been called a major setback to the government’s plan to eliminate the use of leaded gasoline. Premium is a dirty fuel because of its negative impact not only on vehicle engines but also on the environment.
House of Representatives Commission VII, which oversees energy policies, recently advised the government to discontinue the sale of Premium and provide a subsidy for fuel with higher RON instead.
“People don’t take RON levels into consideration, so when Pertamax [Pertamina’s RON 92 fuel] is cheap, then that’s what they’ll buy,” said House Commission VII member Kardaya Warnika during a recent meeting with the Energy and Mineral Resources Ministry.
Responding to the criticism, Minister Ignasius Jonan acknowledged that vehicle owners were more concerned about prices than RON levels.
He said the solution was for the Industry Ministry to oblige automakers to manufacture low-emission vehicles. “When there are no cars or motorcycles that can use low octane fuel, the fuel will be gone, too,” he said.
Separately, Association of Indonesian Automotive Manufacturers (Gaikindo) co-chairman Jongkie Sugiarto said the Industry Ministry for 11 years had been instructing automakers to manufacture motorized vehicles in accordance with the Euro 2 emissions standard. Vehicles of that standard need fuel with a RON level of no less than 91.
“However, many people still neglect their engine requirements and continue to buy Premium,” he told The Jakarta Post on Friday.
He said he hoped the upcoming adoption of the Euro 4 emissions standard for motorized vehicles would make vehicle owners understand that Premium was no longer tolerable for vehicle engines.
Separately, the executive director of the Committee for the Phasing Out of Leaded Fuel (KPBB), Ahmad Safrudin, said the policy was a setback in the fight for cleaner air.
Ahmad said the policy would cause a 20 percent increase in the production of carbon dioxide (CO2), carbon monoxide and hydro carbon. The latter two are known as materials that can cause cancer.
“This is a ridiculous policy, as the government has already set the Euro 2 standard, which [requires a fuel quality] of at least RON 92,” he told the Post recently.
The Euro 2 standard for motorized vehicles was adopted in 2007 and replaced by Euro 3 five years ago.
Earlier this year, the government announced a plan to provide 7.5 million kiloliters of Premium in the country excluding Java, Bali and Madura. The government had initially planned to phase out the fuel in the three areas.
With the revision of the regulation, the Downstream Oil and Gas Regulatory Agency (BPH Migas) calculated that the government would need to provide an additional 5.1 million kl of Premium until the end of this year, which would total to 12.5 million kl, or the same number of Premium-brand gasoline provided in 2017.
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