Fuel smuggling costs Indonesia Rp 3 trillion per year: Official

Fuel smuggling, prompted by the government?s fuel subsidy policy, cost Indonesia Rp 3 trillion per year (about US$300 million), a senior official of the Ministry of Energy and Mineral Resources was quoted by several local papers as saying Thursday.

Director general of oil and gas Rachmat Sudibyo said state oil and gas company Pertamina supplies a total of 56 million kiloliters of fuel per year on the domestic market, including 20 million kiloliters of automotive diesel oil and ten million kiloliters of kerosene.

An estimated three million kiloliters of automotive diesel oil and kerosene have been illegally shipped out of the country per year, he said.

Assuming that the smugglers gain Rp 1,000 in profit per kiloliter, the smugglers have caused a total of Rp 3 trillion in losses on the government per year, Rachmat said.

This figures contradict recent allegations by Coordinating Minister of the Economy Dorodjatun Kuntjoro-Jakti who said the losses caused by the fuel smugglers on the government totaled Rp 57 trillion. Meanwhile, Pertamina?s president Baihaki Hakim estimated the losses at Rp 6 trillion.

Fuel smuggling is prompted by the government?s fuel subsidy which makes fuel cost much cheaper on the domestic market than overseas. (*)