Fuel smuggling causes loss of US$5.6 billion a year

Saturday, December 8 2001 - 02:05 AM WIB

The government suffers at least Rp 56 trillion (about US$5.6 billion) a year due to the smuggling of subsidized fuel from the country, Kompas quotes Coordinating Minister for Economy Dorodjatun Kuntjoro-jakti.

?The amount of loss is far larger than the loan received by Indonesia from the Consultative Group on Indonesia (CGI) a year,? Dorodjatun told reporters following his inspection at Petamina?s fuel distribution center at Tanjung Priok, East Jakarta.

According to Dorodjatun, the Indonesian water is heaven for smugglers. This has become a common place to smuggle fuel from Indonesia and to illegally bring in electronics products.

Besides being smuggled to the neighboring countries, the heavily fuel, particularly the diesel oil, is also abused by industrial companies.

Although the government has removed the subsidy on the diesel oil for industries, the fuel sold at the gasoline stations (to the public) is still heavily subsidized. The price difference has encouraged industries to illegally buy from the gas stations. The heavily subsidized oil is also smuggled to neighboring countries. (*)

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