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Govt warns Pertamina on sales of subsidized diesel
The Downstream Oil and Gas Regulatory Agency (BPH Migas) wrote in the letter that, as of last month, the distribution of subsidized diesel had reached 80.46 percent of the 14.5 million kiloliters stipulated in this year’s state budget.
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BPH Migas wrote in the letter that, as of last month, the distribution of subsidized diesel had reached 80.46 percent of the 14.5 million kiloliters stipulated in this year’s state budget. (Shutterstock/File)
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government agency has sent a letter to state-owned energy holding company Pertamina urging restraint in the distribution of subsidized diesel, lest the enterprise breach the quota set by the government.
The Downstream Oil and Gas Regulatory Agency (BPH Migas) wrote in the letter that, as of last month, the distribution of subsidized diesel had reached 80.46 percent of the 14.5 million kiloliters stipulated in this year’s state budget.
The distribution should have reached only 73.42 percent of the annual quota in the first nine months of the year, according to BPH Migas, and thus might exceed the budgeted limit as early as November.
“If there is no control of the diesel distribution, the 2019 quota [may be exceeded] by up to 1.57 million kl,” wrote BPH Migas, based on the extrapolation of subsidized diesel dispensations in the January-September period.
Exceeding the quota would spell trouble for the government, because it would need to disburse additional funds from the state budget to subsidize diesel sales until the end of the year. This would be a burden on the budget, which is also used to fund public schools, hospitals and infrastructure development, among other things.
BPH Migas had, in fact, capped subsidized diesel distribution through a circular implemented on Aug. 1. However, less than two months later, on Sept. 27, the Energy and Mineral Resources Ministry ordered BPH Migas to scrap the instruction.
