Pertamax Imports Needed if Subsidized Oil Consumption Limited

Jakarta, Indonesia (News Today) - If the government pushes through its plan to limit subsidized fuel oil consumption next January 1, it will have to import Pertamax, the unsubsidized fuel oil type, to meet motorists’ need nation-wide, an energy research organization said.

The imports would be imperative because state oil company Pertamina’s production of Pertamax was only 200,000 kiloliters per day which would be far from enough to meet the highly increased domestic need, Komaidi, director of ReforMiner, said here Saturday.

The limitation of subsidized fuel oil use would force most motorists to switch from premium to the unsubsidized fuel oil type, Pertamax, and demand for this fuel would automatically soar to an as yet unknown level, he said. Besides, the government was in reality not yet ready to implement its plan to limit subsidized fuel oil consumption next January because of infrastructure constraints.

"It is still difficult for the government to limit subsidized fuel oil consumption beginning on January 1, 2011 because not all the needed infrastructure facilities have been prepared," Komaidi said in a discussion on fuel oil consumption restriction here on Saturday.

Komaidi explained that of the 600 fuel oil refilling stations (SPBU) in Jakarta, Bogor, Depok, Tangerang and Bekasi (Jabodetabek), only about 66.67 percent were now ready to sell pertamax fuel oil. In the meantime, of the 2,800 SPBUs in Java and Bali, only about 35 percent were ready.

In order to carry out subsidized fuel oil consumption limitation, the government needed to prepare adjusted dispensers. Based on a prediction of the Downstream Oil and Gas Regulating Agency (BPH Migas), the government would need about six months to one year to build dispenser infrastructure at 200 SPBUs to enable them to sell Pertamax.

"The provision and installation of the dispensers will also require an investment," he said.

Latif Adam of the Indonesian Institute of Sciences (LIPI) also agreed that the government was not yet ready to carry out the fuel consumption limitation policy in January. If the policy was imposed, many private car owners would have to leave their cars at home and use public transport to reach their destinations whereas no preparations had been made to accommodate this switch.

Latif Adam suggested that the government should impose a tight supervision if it carries out its policy on the limitation of subsidized fuel oil consumption.

"This is because it is not impossible that a black market will come into existence as a result of wide price disparities," he said.

Source : kompas

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