Fuel Oil Restriction Deemed Ineffective, Pertamina
Release Date: 2012-01-10
JAKARTA (IFT) - The government’s plan to regulate fuel oil (BBM) subsidy in April 2012 to save on subsidy is considered inappropriate and ineffective by several energy analysts. The plan is as good as forcing Premium gasoline consumers to buy Pertamax.
Kurtubi, oil analyst from the University of Indonesia, assessed the policy as requiring expensive supervision. He also opines that the policy will never be effective and will only prolong Indonesia’s dependency on importing oil.
According to him, lowering fuel subsidy can be done by encouraging people to use non-oil fuel—particularly gas. But building gas infrastructure requires extensive research and time, and can only be started in Java and Bali. If the restriction takes into effect in April, he continued, it is impossible to develop gas infrastructure before April.
''Now it's up to the government, if the policy is applied, it will reap strong reaction from the community,” he warned.
Pri Agung Rakhmanto, Executive Director of the Refor-Miner Institute, believes that the government can save a bigger budget by raising subsidized fuel prices instead of restrictions. If subsidized fuel is raised by Rp 1,000 per liter for Premium gasoline and Solar diesel, the state can save Rp 38.3 trillion (US$ 4.21 billion).
Pri added the policy’s technicality is doable. But given the price disparity between subsidized and nonsubsidized fuel, he is certain that the policy will create room for frauds and misappropriations. He also said that if the policy is applied, in two to three years, Indonesia will face more fuel subsidy quota and budget problems as there will be more motorcycle users.
Conversely, A Qoyum Tjandranegara, Member of the Executive Committee of the Executive Agency for Oil and Gas (BP Migas) said that limiting subsidized fuel consumption is necessary and must be implemented although difficult. According to him, restricting subsidized fuel for private car owners is appropriate because said owners are people from the middle and upper class—considered financially capable to buy non subsidized fuel oil.
As of today, Qoyum said, private cars consume about 70 percent of subsidized fuel quota. With the implementation of this policy, the 70 percent will be erased.
Widjajono Partowidagdo, Deputy Minister of Energy and Mineral Resources, previously said that the government could have raised fuel prices if global crude oil price reached US$ 150 per barrel. However, the option depends entirely on the President.
| Type: | NORMAL |
| Company: | Pertamina |
| Country: | 印尼 |
| Url: | http://en.indonesiafinancetoday.com/read/15643/Fuel-Oil-Restriction-Deemed-Ineffective- |