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Downstream still bad business for Pertamina
As revenue from fossil fuels decline, it’s crucial now to develop clean energy. Indonesia’s experience shows it can grow its economy without expanding fossil fuel extraction.
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Pertamina president director Nicke Widyawati (front) fills up a car in Tasikmalaya, West Java, on Feb. 12, while marketing director Masud Khamid (right, behind) looks on. (Antara/Adeng Bustomi)
W
ithout the government subsidy and compensation, state-owned energy holding company Pertamina will only book a small profit or even a loss in 2018, in contrast with the announcement of a US$2.53 billion net profit.
According to the firm’s financial report in 2018, the government has a debt amounting to $3.1 billion to Pertamina to not increase the price of Kerosene, Solar and Premium despite the global oil price moving to around $60 per barrel.
The debt was accounted as a receivable that subsequently helped to lift Pertamina’s overall financial performance in 2018, with its net profit in that year down from the previous period at $2.54 billion.
Although it may help beautify the 2018 financial report, the actual payment from the government is “still in process”, said Pertamina finance director Pahala Mansury after attending the firm’s annual general shareholders meeting on Friday last week.
“In 2018, we got [a government pledge for] compensation for selling fuel below market price. However, the payment is still being processed,” he said.
“We need to talk further with the government as it needs to consider its fiscal and financial condition [before paying the debt]. But at least, the government had recognized [that it owes] Pertamina,”
The kind of debt, which did not exist in 2017, came after President Joko “Jokowi” Widodo issued Presidential Regulation (Perpres) No. 43/2018 in May last year that caused a price adjustment to Kerosene, Solar and Premium.
