BPHMigas criticizes Pertamina over subsidized fuel policy

By Godang Sitompul

Downstream oil and gas regulator BPHMigas criticized state-owned oil and gas firm Pertamina over move to abandon a recent joint decision to limit the distribution of subsidized fuel products in the remaining period of this year.

In line with a November 7, 2012 directive from BPHMigas, Pertamina began to limit the distribution of subsidized fuel products in the remaining period of the year in a bid to ensure that the full-year quota of 44.04 million kilo liters is not exceeded.

But on November 25, Pertamina decided to abandon the policy on fears that a shortage of subsidized fuel products in the regions could trigger social unrest.

?BPHMigas does not agree with Pertamina for abandoning the limit (on the supply of subsidized fuel products) because it?s been a joint decision and is the best solution (to avoid escalating fuel subsidy budget),? Fuel Director at BPHMigas Djoko Siswanto told Petromindo.com Monday.

He added that BPHMigas will continue to make a campaign that limiting the distribution of subsidized fuel products is an important measure.

Pertamina, however, argued that after observing the condition in the regions in the wake of the recent move to limit the distribution of subsidized fuel products, the company has decided to abandon the policy.

?Considering the development of the social situation in the regions in the wake of the new policy, and taking into account the greater national interest, we decided that starting November 25, Pertamina has abandoned the (earlier) policy of limiting the subsidized fuel products while waiting for further government directive,? said Vice President of Communications at Pertamina, Ali Mundakir.

Editing by Reiner Simanjuntak