Pertamina's task to sell subsidized kerosene to be evaluated

State-owned oil and gas company Pertamina's public obligation service (PSO) to distribute and sell the heavily subsidized kerosene will be evaluated following reports of the acute shortages of the fuel supply in some areas in the country, Sindo reported Monday.

 

The PSO which gives Pertamina the monopoly on the distribution and the sales of the heavily subsidized kerosene is no longer effective, Eri Purnomohadi, a senior official of BPH Migas, said in Jakarta on Saturday.

 

He said that the evaluation would be carried on the sales of the heavily subsidized kerosene for the period of between January and June. "The result of the evaluation will be used as the basis in determining the profit margin for the kerosene sales," he said.

 

Eri said that this year, the profit margin given to Pertamina for the sales of kerosene was increased to 14.1 percent from only 5 percent in the period of between 2001 and 2002. "Next year, it would be reduced to 13.5 percent. But it is not impossible to bring back the margin to 5 percent," he said.

 

"Pertamina should coordinate the sales of the kerosene with those involved in the kerosene to LPG conversion program so that there is no reports of kerosene shortages," he said.

 

Meanwhile Trijono, a member of BPH Migas, said some areas are experiencing shortage of kerosene because Pertamina have stopped distributing the fuel and suplied them with liquifed petroleum gas (LPG) instead.

 

The move by Pertamina contravened the agreement with BPH Migas in which the state owned company will only cut the kerosene supply by 70 percent in areas which are part of the target areas of the government's kerosene-to-LPG program. (*)