New Pertamina?s chief commissioner tasked to stop fuel smuggling

In a bid to help stop rampant fuel smuggling, the government has named retired general Endriartono Sutarto as the chief commissioner of stare oil and gas company Pertamina.

?We are aware that oil and its derivatives are vital resources that need to be managed and protected carefully. We need a figure who can do that job, and I believe, Pak Endriartono, who has a military background, will be able to do the task, especially as regards fuel smuggling,? State Minister for State Enterprises Sugiharto was quoted as saying by Jakarta Post.

Endriartono replaces Martiono Hadianto, who had held the office since 2005.

Besides Endriartono, the government appointed two other new commissioners Maizar Rahman, who is also the Organization of Petroleum Exporting Countries (OPEC)?s chief representative for Indonesia, and Irnanda Laksanawan, the ministry?s deputy assistant for strategic industries. The other two members of the five-member Board of Commissioners are Umar Said and Muhammad Abduh.

In his speech during the inauguration ceremony, Sugiharto urged Pertamina, which has total assets of about Rp 100 trillion (about US$11 billion), to improve its efficiency so as to increase dividend payments to the government.

Next year, the government hopes to pocket dividends of Rp 19.1 trillion from state-owned companies, of which about 50 percent is expected to come from Pertamina.

The 2007 dividend target is much higher than this year?s Rp 8.3 trillion.

When asked about his perceived lack of knowledge of the oil sector, Endriartono said he was ?not worried? as he would start studying the latest developments in the field.

?In general, we (the Army and Pertamina) have similar management styles, especially as regards dealing with conflicts. I?m not overly concerned as I have the directors, who will back me up on the technical aspects,? Endriartono said.

The government has allocated approximately Rp 64.2 trillion for fuel subsidies this year.

The government loses trillions of rupiah every year from fuel smuggling, especially that of subsidized kerosene. In addition, other subsidized fuels, including gasoline and diesel, are frequently sold illegally to industries, which are supposed to buy these fuels at market prices. (*)