Tuesday, 23 September 2014


Restriction of oil fuel consumption drew the attention of all circles and apparently this was the issue that generated systemic effect because everyone from businessmen to housewives sang the same tune “Life’s getting harder”

Various reactions sparked from businessplayers. Cement producers were beginning to complain about the Government and PT Pertamina’s effort to reduce consumption of subsidized oil fuel starting from restriction to axing of daily quota of oil at gas stations. An action as such would have its effect on company’s operational cost.

President of PT Cement Indonesia Tbk [SMGR] Dwi soetjipto stated that scarcity of subsidized oil fuel had caused long queue in gas stations [SPBU] and might pose a threat. “The situation is now not so grave but wait till solar oil also disappears” Dwi stated in Jakarta after attending a seminar entitled “To encourage BUMN to go international” in Jakarta on Tuesday [26/8]

Dwi elaborated that although they have made calculations of non subsidized oil, industrialists would be trouble if there was actually scarcity of oil fuel. Dwi believed that producers would find it hard to find oil fuel. For long thy had calculated use of unsubsidized solar oil. “The industrial solar oil is used, in case of restrictions producers and drivers would seek for it” he said.

To anticipate scarcity of oil, SMGR had agreed not use subsidized oil in operating their machines. Dwi expected the next Government to reform regulations and secure investment abroad. “Developed countries have regulations to secure investments abroad. We too must do must the same, so we can strengthen competitiveness and go international. “Dwi said.

Today total capacity of all cement factories in Indonesia was posted at 31.8 million tons, an increase of 12.600% against previous capacity which was only 250,000 tons. “What we reap today is what would be gained by Indonesia’s cement in the next 4 to 5 years? The answer is: what we sow this year!” if the company failed to plant this year, nothing will grow in the coming year” Dwi said.

Energy observer from the University of Indonesia Iwa Garniwa said, scarcity of oil was because quota for subsidized oil had exceeded the Government at that time made a policy to restrict distribution of subsidized oil.

Unfortunately the policy was not effective because the Government prioritized oil supply more for the urban areas causing the rural areas to suffer from oil scarcity. “So the strategy was unwise and effectiveness was low.” Iwa said.

Iwa stated that the policy of restriction by the Government such as prohibition to sell Premium type of oil at toll road’s rest area and sales of subsidized solar oil at certain times was most unwise; it was just as if the Government threw the problem away to the field.

Meanwhile executive Director of Energy Watch Mamit Setiawan said that the Government’s policy was a halfway solution. Logically if the Government had run the policy of restriction of subsidized oil, there should be no scarcity. Under supply of subsidized oil in some regions was because the volume allocated by Pertamina per region had exceeded the quota.

“The Susilo Bambang Yudhoyono [SBY] Government refused to increase price of subsidized oil. Automatically as there was oil scarcity, the next Government must take steps to increase quota and increase price of subsidized oil.” Mamit concluded. (SS)

Business News - August 29, 2014

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