Jakarta – State oil and gas company PT Pertamina said Friday it had discovered that tens of thousands of liters of kerosene designated for household use were being hoarded at a number of fuel depots in Depok and Bogor.
It was the first such finding since kerosene shortages hit Jakarta, Bogor, Depok, Tangerang and Bekasi last month, causing panic buying among households.
"We found that four fuel depots in Depok and Bogor were hoarding kerosene, possibly to sell to industries for up to Rp 5,000 a liter," said Pertamina official Ari Widoyono, who is also a member of the investigative team formed by the Coordinating Ministry for Political, Security and Legal Affairs.
He said a fuel depot in Cibinong, for example, had stocked more than 19,000 liters of kerosene "We have handed over the case to police... We will cut kerosene supply to Depok," he was quoted as saying by Antara.
The team will also investigate the possibility kerosene hoarding is going on in Bekasi, Tangerang and Karawang. Ari said subsidized kerosene tended to get diverted away from households to industries. "According to our calculations, six out of 10 industries are using subsidized kerosene."
The government has set the maximum retail price of kerosene at Rp 2,275 per liter for households and Rp 6,000 per liter for industries.
Many have said the substantial price gap between kerosene for household and industrial use is to blame for the frequent shortages in the country. Kerosene is widely used as a cooking fuel by the poor.
The government allocated Rp 40 trillion in 2006 to subsidize the price of 9.9 million kiloliters of kerosene for household use.
To reduce kerosene consumption and soaring fuel subsidy costs amid surging global oil prices, the government is encouraging households to switch to using liquefied petroleum gas (LPG).
One kilogram of LPG is more or less equal in energy content to three liters of kerosene.
Pertamina has said it will start distributing three-and-half kilogram cylinders of LPG to households and food vendors in Jakarta this month.