Pertamina cancels plan to reduce fuel supply

President Susilo Bambang Yudhoyono has asked Pertamina not to reduce fuel supply in the domestic market and promised that the government would pay the subsidy for the additional fuel supply, Kompas reported on Wednesday.

"President has asked Pertamina not to reduce oil supply. The supply of Premium and other types of fuel should be continued to meet the demand," Minister of Energy and Mineral Resources Purnomo Yusgiantoro said following a cabinet meeting on Tuesday.

Purnomo said that the government was still calculating the additional amount of state funds needed to pay the subsidy for the additional fuel supply to ensure that the public's demand for fuel could be met.

Pertamina said early this week it would reduce the supply of the heavily-subsidized Premium and diesel oil particularly during the weekend because the sales of the subsidized fuel had exceeded the subsidy quota set by the government.

According to Purnomo, the sale of the subsidized fuel in the domestic market had reached 10 percent above the subsidy quota as of May this year.(*)