Govt will continue cover the cost of Pertamina's fuel procurement
Saturday, May 7 2005 - 02:49 AM WIB
"The government will cover all the cost of the fuel procurement as long as Pertamina is still required to carry out its public service obligation," the minister said when asked if Pertamina was still required to carry out its PSO activities. In addition to procurement cost, the government is required to pay a profit margin and commission to Pertamina.
BPH Migas, the government's agency in charge of downstream oil and gas industries, said recently that Pertamina's PSO task would be ended by the end of this year in line with the removal of its monopoly in the domestic fuel market.
Purnomo said that the government understood the financial difficulties suffered by Pertamina and promised to help cope with the financial problem. As earlier reported Pertamina needed at least US$1.1 billion cash this week to finance its crude oil imports, while its letter of credit facilities could not be extended due to the delay in the disbursement of fuel subsidy from the finance ministry.
Meanwhile, the director general of state treasury at the ministry of finance, Mulia P. Nasution, said that his office was in the process of disbursing fuel subsidy worth about Rp 3.3 trillion to Pertamina.
"We hope the disbursement of the fuel subsidy could be made next week," he said.
The disbursement of the fuel subsidy has often been delayed because the ministry of finance needs to verify the total cost of fuel procurement made by the state owned oil and gas company before settling the fuel subsidy payment. The delay has caused serious problem in Petamina's cash liquidity. (*)