Govt mulls new kerosene for households

The government is considering a plan to launch a new kind of kerosene for household use that could save nearly Rp18 trillion per year, The Jakarta Post reported Friday citing an official.

?The oil and gas institute (known as Lemigas) is currently conducting a study on the proper composition of the new kerosene,? the news paper quoted chairman of Oil and Gas Downstream Regulatory Agency (BPH MIGAS) Tubagus Haryono as saying.

As the new fuel would have a higher carbon content, Lemigas will study possible affects on health and environment, Tubagus said.

?The quality of the new kerosene will not be as good as pure kerosene but it will be able to fire a stove,? he said.

Assuming that consumption of kerosene by households reached 9.46 million kilo liters per year and the composition of the new kerosene is 65 percent bunker oil and 35 percent regular kerosene, the state could save Rp17.87 trillion annually, the report said.

Kerosene price for household use is currently fixed at Rp700 per liter or 25 percent of its standard price of Rp2,790 per liter, with the government paying for the balance.

Meanwhile, the price of kerosene sold to industry is Rp2,200 a liter. The big price gap often causes scarcities as vendors opt to smuggle or sell to industry for profit.

The report said the new kerosene standard price could be lowered to Rp2,471 per liter.

Tubagus also said that it is hoped the new kerosene will stop smuggling because it cannot be sold on the international markets as it is not pure kerosene. (*)