Pertamina turns down PLN's request for more subsidized fuel

State-owned oil and gas company Pertamina has turned down state owned electricity company PLN's request for an increase in its subsidized fuel quota to 11.4 million kilo liters from 8.4 million kilo liters, Investor Daily reported on Monday.

PLN's president director Eddie Widiono said late last week that Pertamina had no objection to meet the increase in the demand for diesel fuel from the electricity company this year.

"But Pertamina would only provide subsidized fuel amounting to only 8.4 million kilo liters. PLN should pay the remaining fuel at a market price," he was quoted as saying.

The government has allocated subsidy funds for about 59 million-kilo liters this year. About 8.4 million kilo liters of the total has been allocated for PLN.

Eddie said that PLN needed at least 11.4 million kilo liters of diesel oil this year to meet the increase in the fuel demand from its power plants.

Thanks to the government's subsidy, PLN now buys the fuel from Pertamina at the price of Rp 2,200 per liter, as against the market price of between Rp 3,000 to Rp 4,000 per liter. "If PLN needs more than 8.4 million kilo liters, it should pay the remainders at a market price," Pertamina's spokesman Mustiko Saleh said. (*)