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Jakarta Post

Government agency fixes subsidized fuels allocation for 2020

  • Norman Harsono
    Norman Harsono

    The Jakarta Post

Jakarta   /   Tue, December 31, 2019   /   09:30 am
Government agency fixes subsidized fuels allocation for 2020 An attendant serves a customer at a gas station in Sorong, West Papua, on Saturday. State-owned energy holding company Pertamina cut the prices of nonsubsidized gasoline by between Rp 100 and Rp 250 per liter to attract more customers. (Antara/Olha Mulalinda)

The Downstream Oil and Gas Regulatory Agency (BPH Migas) has fixed next year’s allocation of subsidized fuels at 26.87 million kiloliters (kL), up 3 percent from last year, following a meeting with House of Representatives members last week

BPH Migas said in a statement on Monday that next year’s subsidized fuel allocation consisted of diesel (57 percent), gasoline (41 percent) and kerosene (2 percent). The fuels are respectively most used to power logistical transportation, private vehicles and rural cook stoves.

“We will tighten monitoring of fuel distribution in 2020,” said BPH Migas head Fanshurullah Asa in Jakarta. "Why do we do so? It is to ensure that we do not exceed the quota."

He was referring to the fact that Indonesia exceeded its subsidized diesel quota in November this year for the first time in four years, according to BPH Migas records. The ballooning energy subsidy will weigh on the state budget.

Diesel subsidies alone might cost the state budget up to Rp 30.62 trillion (US$2.2 billion) next year. Such subsidies have been capped at Rp 2,000 per liter since the Energy and Mineral Resources Ministry issued Regulation No. 40/2018.

As decided in late 2017, state-owned oil company Pertamina and publicly listed fuel distributor AKR Corporindo are to distribute the subsidized fuels next year. The two companies are slated to handle distribution until 2022.



Subsidized fuel distribution breakdown: 2019 versus 2020 (in kiloliters)

 

2019

2020

Pertamina

AKR Tbk 

Pertamina

AKR Tbk  

Diesel

14,266,000

234,000 

15,076,000

234,000 

Kerosene

610,000

0

560,000

0

Gasoline (Premium)

11,000,000 

0

11,000,000 

0

 

25,867,000

234,000

26,636,000

234,000

Total

26,110,000

26,870,000