Legislators urge Bukit Asam to further develop its briquet projects

Several legislators have urged that state owned coal company PT Bukit Asam to further develop the briquet projects that it has neglected for years, Jakarta-based daily Neraca reported Wednesday.

The legislators, including Husni Thamrin and Azwir Dainy Tata, said that briquet could become a cheaper alternative to kerosene once the government revokes subsidies for oil-based fuel in 2004.

The legislators promised to push the government to award subsidies for Bukit Asam to expand its briquet production facilities.

They said Bukit Asam needed the government?s subsidies to set up briquet production facilities in many places across the country. But, the government has to lift the subsidies once Bukit Asam is able to produce briquet at the competitive price against kerosene.

Bukit Asam has set up three briquet production facilities in Tanjung Enim, South Sumatra; Gresik, East Java and Lampung. The company set up the facilities several years ago at the request of the former President Soeharto administration following the government?s plan to provide briquet as an alternative to kerosene which is heavily subsidized by the government.

Bukit Asam?s technical director AC Purba admitted that the company has much neglected its briquet production facilities due to their high production costs and the inability of its products to compete with kerosene in terms of price.

He said its Gresik plant now produces only 5,000 tons per year, as against its capacity of between 70,000 and 80,000 tons per year.

He said the public would not buy briquet as long as the government maintains its policy of providing subsidies for kerosene. He thus called on the government to scrap the government?s subsidy for the type of fuel.

The government heavily subsidizes kerosene because it is mostly used by poor people. (*)