Pertamina to look for bank loans to boost fuel stock

State oil and gas company PT Pertamina will borrow money from banks to increase the national fuel stock to the level of 23-24 days, the Koran Tempo newspaper reported in its Saturday edition.

Director-general of oil and gas Iin Arifin Takhyan said Pertamina will take the above step in anticipation of problems with its cash flow due to delay in payment of fuel subsidy by the government.

According to Iin, Pertamina has always been facing problems with its cash flow because the ministry of finance always pays fuel subsidy amount to Pertamina with delay of one month. Actually, the payment must be on time for the activities like production and maintenance of fuel stock.

?If there is a delay in payment, the only solution will be borrowing from banks,? Iin told the reporters in Jakarta on Friday.

Government may arrange a bridging loan facility from Bank Mandiri to Pertamina. The loan will be only for maintenance of national fuel stocks. Even the government may provide guarantee for the loan.

Earlier Pertamina president director Widya Purnama said his company needs US$200 million in order to increase the national fuel stock from 20 days to 24 days.

Pertamina had created fuel task forces to safeguard fuel distribution during and after the Ramadhan fasting month, which sees surging demands of fuel due to the exodus and influx of population during the Idul Fitri holidays at the end of Ramadhan.

Indonesia needs 72,000 kiloliters of diesel, 32,000 kiloliters of kerosene and 44,000 kiloliters of gasoline everyday. In total, Indonesia consumes 178,000 kiloliters of various types of fuel per day. (*)