The Government set national economic growth at 6.9% in 2012 an increase against realized economic growth In 2011 at 6.4%. Economic growth of a nation was strongly related to energy supply, especially oil fuel. Moreover as economy grew, people’s purchasing power would be uplifted and the number of vehicles were bound to swell which in the end would increase consumption of oil especially diesel.
Consumption of diesel (solar) oil increased on the average by 6% in the past 5 years while consumption of Premium oil increased by 8% per year; in 2011 increase of national oil consumption even reached 11%, the highest in history. This year, in line with the outspreading of investment and industry to some areas outside Java based on the Indonesian Economic Development Acceleration Masterplan (MP3EI) in some provinces of regencies/cities outside Java oil consumption grew by up to 25%. “Growing need for oil especially for land transportation was a reality as impact on national economic progress” Al Mundakir, VP Corporate Communication Pertamina disclosed to Business News (26/11).
On the other hand, apparently in the past 5 years realization of oil consumption tend to be above quota. The year 2006 was the last time that realization of subsidizes oil consumption was below the stipulated quote. Last year in 2011, realization of oil consumption reached 41.7 million KL or 40.4 million KL. However, quota of subsidized oil this year was once sat at 40 million kilolitres or less than realization of the previous year.
Assuming that quota for subsidized oil at that time were riot increased, especially when controlling program as planned by the Government was not totally successful, it was just like denying the achieved economic growth. Eventually the Government and House stipulated additional quota to become 44.04 kilolitre in September 2012 of which 43.88 million kilolitres was Pertamina’s responsibility. The additional oil quota was in fact below Pertamina’s projection which was forwarded during stipulation of APBN budget assumption of 2012, i.e. 45.24 million KL.
Based on meeting to evaluate pipelining of subsidized oil in October and November 2012 which was being coordinated by the office of Vice President and attended by related ministers, it was necessary for the Government to control pipelining of subsidized oil so as not to exceed quota. Of several options for solution, the Government assigned Pertamina to control pipelining of subsidized oil by way of proportional quote application in each province according to remaining quote divided by remaining days till end of year.
With reference to letter of BPH Migas no 943/07/Ka/Bph/2012 dated November 2012 re Distribution Control of remaining quota of Subsidized oil 2012, Pertamina was beginning to control with windmill per November 19, 2012, with axing of daily quota in all gas stations and other distributors whose percentage varied between 1% to 36% according to the remaining quota in related area. Based on data per November 23, 2012, while windmill was exercised there had been average savings of around 13% of normal pipelining projection in that period for diesel and 10% for Premium.
While windmill was exercised in the past week, there was notable long queue in gas stations in all regions like Batam, Pangkalpinang, Banka Belitung, Jambi, Bengkulu, Palembang, Tanjung Pinang, Lampung, Tarakan, Palangkaraya, Pontianak, West Kutai, Masalembu, Surabya, Sidoardjo, Atambua, Flores, Kupang and other regions. In fact Pertamina had been preparing non subsidized oil in all provinces in Indonesia as alternative for the people. Somehow queue continued to happen because the people persisted to use subsidized oil, they were even willing to sleep in gas stations although non-subsidized oil were still available. “This indicates the fact that the public are not fully ready to buy gas at un-subsidized price as long as there are subsidized oil available” Al Mundakir remarked.
In some regions, queue had triggered tensions. There were potential queue to happen in other regions and had the potential to create horizontal conflicts the way it happened in West Kutai.
Based on the reality afield and based on Pertamina’s sense of responsibility ro maintain national security stability, as per 25 November 2012 Pertamina decided to distribute subsidized oil the normal way while waiting for further directives from the Government up to November 24, 2012, realization of Premium pipelining reached 25.2 million KL and Diesel 12.9 million KL. Through normalization of subsidized oil distribution it was predicted that quota of subsidized oil would be surpassed by around 450,000 KL respectively. In this case Pertamina always consulted the Government c.q the Ministry of Energy and Mineral Affairs (and formerly BPH MIGAS) as authorizer.
Pertamina was constantly consulting the Government in regard to the plan to run the National Day Without Subsidized Oil which would be exercised on December 2, 2012, where Pertamina had the assignment to run the program. The potential for saving form this movement was around 15,000 KL with total value being saved at Rp 75 billion. However, so far Pertamina had not received any official letter in regard to the National Movement from the Government.
While waiting for formal letter from the Government, Pertamina was beginning to inform the Association of National Oil-gas Entrepreneurs (HI-AWANA MIGAS) that on that day as from 06.00 AM to 18.00 PM all gas stations operating in Java-Bali and 5 other big cities outside Java, namely: Medan, Batam, Palembang, Balikpapan and Makassar would stop serving subsidized oil and would prepare altetnative of non-subsidized oil, i.e. Pertamina and Pertamax Plus. The public needed not to worry because gas stations would remain to operate and oil would be ready for sale.
Business News - November 30, 2012