Jakarta to use up annual subsidized fuel quota by next week

0

Drivers fill up at a Pertamina gas station in Lempuyangan, Yogyakarta in this file photo. Credit: (JG Photo/ Boy T. Harjanto)

Jakarta is set to burn through its annual quota of subsidized fuel by next week, and four other provinces would do so by October and early November, according to The Jakarta Globe Report.

Pertamina data made public on Tuesday shows that as of Aug. 30, 2012, Jakarta has already used 1.41 million kiloliters of subsidized fuel this year, according to migasnews.com. This figure is 37.4 percent higher than the allotted quota for Jakarta for the year up to August, which is 1.03 million kiloliters.

The state energy company forecasts that the capital would use up its total annual quota of subsidized fuel by Sept. 15.

West Java, West Kalimantan, Riau Islands and South Kalimantan have all also exceeded their quotas and would use up their annual allocation of subsidized fuel by October or November unless the government does something.

Typically during periods of unanticipated demand, the government provides more fuel to meet consumer needs while asking users to deploy fuel in an efficient manner.

Speaking on Wednesday, Coordinating Minister for the Economy Hatta Rajasa said he would ask lawmakers to increase the total 2012 quota for subsidized fuel, which currently stands at 40 million kiloliters.

The 2012 subsidized fuel quota, defined in the annual state budget, was originally forecast with the expectation of a subsidized fuel price hike this year. However, the House of Representatives in March rejected an initial government proposal for a 33 percent increase in the subsidized fuel price to Rp 6,000 (65 cents) a liter, from the current Rp 4,500.

As of Aug. 30, or two-thirds into the year, Pertamina data shows that 29.32 million kiloliters, or 75 percent of the quota, has already been used. The country’s downstream oil and gas regulator, BPH Migas, has said the remaining 10 million kiloliters would not last until the end of the year.

“We will discuss it with the House of Representative,” Hatta said on Wednesday, as quoted by BeritasatuTV. “It should be about 43-44 million kiloliters, in line with the development of our economy and transportation.”

BPH Migas previously forecast the annual consumption to reach 47 million kiloliters. With proper control mechanisms, the Ibrahim Hasyim, an official at the agency, said the quota would still reach 44 million kiloliters.

The government has banned state vehicles from using the subsidized low-octane Premium gasoline, but another plan to restrict its consumption to vehicles with an engine size of less than 1,500 cubic centimeters in May was put on hold.

The Finance Ministry projects that the total subsidized fuel bill could reach Rp 306 trillion ($32 billion) this year, 51 percent more than was allocated, rising about a fifth from last year’s Rp 255.6 trillion.

The subsidy may widen the country’s budget deficit to 2.3 percent of gross domestic product this year from its original target of 2.23 percent.