Indonesian Government Buckles to Kalimantan Pressure, Raises Fuel Quota

By webadmin on 09:14 pm May 13, 2012
Category Archive

Arientha Primanita & Tunggadewa Mattangkilang

Balikpapan, East Kalimantan/Jakarta. The central government has agreed to boost the quantity of subsidized fuel available in Kalimantan after complaints by provincial administrations on the large northern island.

Energy and Mineral Resources Minister Jero Wacik said the expanded fuel quota should resolve the problems faced by businesses in Kalimantan, who have complained that fuel shortages have crimped their profits.

His statement came as the coordinating minister for people’s welfare, Agung Laksono, acknowledged the government needed to increase the subsidized fuel quota, which is the quantity of fuel the government agrees to sell to consumers at a discount. In March, the House of Representatives approved a national budget in which the quota was set at 40 million kiloliters.

“The reality is that 40 million kiloliters is still not enough. We need to change that and seek approval from lawmakers,” Agung said on Friday in Balikpapan.

Long queues at fuel stations across Kalimantan have been common in recent weeks. Low-octane subsidized fuel usually sells at a fixed price of Rp 4,500 (50 cents) per liter, but at one point a bottle containing about a liter of gasoline sold for Rp 10,000 in Tanjung Redeb, East Kalimantan.

East Kalimantan Governor Awang Faroek Ishak on Friday backed local business demand for extra subsidized fuel.

“I think the demand by the business groups is not extraordinary,” Awang said in Balikpapan. “Without fuel, business cannot operate.”

Kalimantan holds some of the country’s largest reserves of coal, oil and natural gas, and it is also home to one of Indonesia’s three liquefied natural gas plants.

Slamet Brotosiswoyo, the chairman of Balikpapan’s Indonesian Employers Association (Apindo), on Friday stood by the business group’s threat earlier in the week to stop transporting minerals from the island in protest of the central government.

“It is not a problem if we suffer losses” due to the protest, he said in Balikpapan. “We are prepared to face any sanctions from our clients.”

A local Pertamina official said there was a lack of fuel in East Kalimantan, noting that demand for fuel in Balikpapan, Samarinda and Berau was high.

The Pertamina official said the quota fell short of consumption in Kalimantan. Last year, the official said, the subsidized fuel quota for Kalimantan was 1,716 kiloliters of gasoline but actual consumption was 1,774 kiloliters. The quota for diesel was 923 kiloliters while demand was 951 kiloliters.