Pertamina to build satellite depots to support Plumpang

Petromindo

State-owned oil and gas company PT Pertamina plans to build new satellite depots next year to ease the responsibilities of the overloaded Plumpang fuel terminal in North Jakarta amid mounting financial burdens the company has been dealing with, The Jakarta Post reported on Tuesday.

The paper said the Plumpang facility, Indonesia?s biggest fuel terminal, supplies fuel for 876 gas stations across Greater Jakarta, and Sukabumi and Puncak in West Java with an average distribution volume of 14,250 kiloliters per day or more than 20 percent of national fuel consumption.

?The Plumpang depot is so big and we have no spare to help cover its fuel distribution,? Pertamina senior vice president for fuel marketing and distribution Gigih Wahyu Han Irianto told reporters on Monday.

The existing satellite depots in Cikampek and Ujungberung in West Java do not have enough capacity to cover for Plumpang.

Pertamina is currently reviewing the locations for the new satellite depots, including in Sukabumi or Depok, and plans to build them next year.

The new depots are projected to cover for 50 percent of Plumpang?s current distribution volume and expected to be constructed within three or four years.

?The most important thing is to ease the burden on the Plumpang depot so that the facility will have enough time for maintenance. Imagine if there was a [capacity] shortage at a Plumpang facility as a result of technical problems. It would pose as too much of a risk,? Gigih said.

Pertamina spokesperson Adiatma Sardjito said the development of the new depots had been a priority program because of the ?critical condition? at the overloaded Plumpang facility, which is located in a densely populated area.

?Fuel distribution can?t rely on just one spot,? Adiatma said, referring to the Plumpang terminal.

In January 2009, a storage tank with a capacity of 5,000 kl at the Plumpang depot was set ablaze, resulting in losses of around Rp 15 billion (US$1.12 million) for the company.

Meanwhile, the decision to build new satellite depots comes on the back of Pertamina?s mounting financial burdens.

Pertamina booked around $900 million in net profit in the first quarter, but with negative operating cash flow of $800 million.

The government had nearly Rp 39 trillion in outstanding subsidy payments to Pertamina as of March 2017 for the sales of subsidized 3-kilogram liquefied petroleum gas (LPG) canisters. The government has committed to repay Rp 5 trillion to Pertamina this year.

?We?ll see where it goes, but we hope the government can repay a bigger amount this year, so that we won?t need to face additional burdens from new loans,? Pertamina president director Elia Massa Manik told The Jakarta Post recently.

Pertamina also previously estimated that it will disburse Rp 5 trillion over the next two years to implement the one-price fuel policy, which aims to set the same fuel prices across Indonesia.

The Energy and Mineral Resources Ministry signed a decree on June 21 stating its decision to maintain the prices of subsidized and specially assigned fuel over the period of July to September, including for Premium gasoline with a research octane number (RON) of 88, subsidized automotive diesel Solar and kerosene.

It means the prices of those fuels will stay at Rp 6,450 per liter for Premium, Rp 5,150 per liter for Solar and Rp 2,500 per liter for kerosene.

The prices, which are evaluated once every three months, have not changed since April 2016 even though global oil prices have fluctuated, forcing Pertamina to bear the burdens when the figures are below their real economic values.(*)