Foreign investors to pay Pertamina for fuel at market price
Wednesday, February 14 2001 - 08:00 AM WIB
Foreign investors will have to buy fuel from state oil and gas company Pertamina at market price under the proposal made by the government.
Minister of Energy and Mineral Resources Purnomo Yusgiantoro said in a written statement presented during the working meeting with the House of Representatives' Commission VIII for energy and mineral resources, environment, science and technology on Wednesday aside from foreign investors, all companies which export more than 50 percent of its output and export-oriented companies which are exempted from value added tax will also have to buy fuel from Pertamina at market price.
Pertamina will also impose market price for fuel on inbound and outbound foreign-flagged ships, outbound Indonesian-flagged ships as well as tankers and barges which carry or buy fuel for fishing ships, according to Purnomo.
The government would issue a presidential decree on the new fuel price policy, he said.
The new fuel price policy was part of the government's plan to raise fuel price this year as part of the efforts to reduce the government's subsidy.
Under the 2001 state budget agreed upon by the government and the House, fuel price will be raised by 20 percent in April 1 this year.
Purnomo noted however that thus far the government thus far remained undecided whether to raise the fuel price as scheduled in consideration of the social and political impacts of the policy.
He said under the presidential decree on the fuel price increase, Pertamina would keep selling fuel to household, small and medium scale industries and cash-strapped state electricity company PT PLN at subsidized price.
Local companies, which sell most of its products locally, had to buy fuel from Pertamina at production price, he said.
The government provided Rp 51 trillion in fuel subsidy or 26 of the state budget for the nine-month 2000 fiscal year, which started in April and ended in December. The amount was twice the size of the government's offshore loan during the fiscal year.
The 12-month 2001 state budget projects fuel subsidy to decrease to Rp 41.3 trillion on the assumptions that the government raise fuel price by 20 percent in April this year, crude price reach US$24 per barrel, and the rupiah's value at Rp 7,800 per US dollar.
Pertamina has projected fuel consumption at 51.8 million kiloliters this year, between 15 percent and 20 percent of which will be imported. (Godang/Bodega)