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Government adds 1.5 million kl to this year’s subsidized diesel quota
Pertamina and the government have struggled to control the distribution of subsidized fuel because of limited corporate oversight and populist protests.
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Full tank: Pertamina president director Nicke Widyawati (front) fills up a car in Tasikmalaya, West Java, on Sunday, while marketing director Masud Khamid (right, behind) looks on. (Antara/Adeng Bustomi)
T
o avoid exceeding this year’s subsidized diesel distribution quota, the government has moved to increase the limit from 14.5 million kiloliters (kl) to 16 million kl.
State-owned oil company Pertamina president director Nicke Widyawati told lawmakers in Jakarta on Thursday that the government had increased the subsidized diesel quota as the initial limit was expected to be surpassed this month.
She said the company, which operates more than 90 percent of domestic gas stations nationwide, saw diesel consumption spike this year due to growing mining and agriculture activities in certain regions and the expansion of the trans-Java and trans-Sumatra toll roads.
In general, Pertamina and the government have struggled to control the distribution of subsidized fuel because of limited corporate oversight and populist protests.
“This year’s quota is smaller than consumption in 2018 and we have calculated that next year’s quota needs to be 17 million kl,” she said.
Subsidized diesel consumption hit 15.58 million kl last year, Downstream Oil and Gas Regulatory Agency (BPH Migas) data show. The government and the House of Representatives have allocated 15.3 million kl for next year.
The increased subsidized diesel fuel quota will be reflected in the 2019 state budget. The government has set aside Rp 100.65 trillion (US$7.15 billion) for energy subsidies this year, or almost half the total subsidy budget of Rp 224.31 trillion.
