Ika Krismantari, Jakarta – The recent fuel prices increase has not hampered consumption, with full-year fuel consumption set to rise 10 percent on the back of a growing economy and a rising number of vehicles, an official says.
Luluk Sumiarso, director general of oil and gas at the Energy and Mineral Resources Ministry, said during a meeting with lawmakers Monday evening the nation's fuel consumption would increase to 39.1 million kiloliters this year.
He said this was partly due to the growth in the economy, which is still targeted to grow at respectable levels of 6.2 percent to 6.4 percent despite the recent 28.6 percent increase in fuel prices.
Luluk said that with the economy growing, people were expected to buy more vehicles, which could lift up consumption, especially for gasoline.
"This year's realization for gasoline will be a bit high since even after the increase people will still buy Premium gasoline rather than nonsubsidized Pertamax, because of the latter's high price," he said of Pertamina's high-octane fuel product.
According to ministry simulations, the higher-than-expected fuel consumption would mostly come from Premium gasoline, which could increase by 14 percent from the initial estimate.
State oil and gas firm PT Pertamina has said that from January to April, fuel consumption reached 12.9 million kl, more than a third of the full-year quota.
Ahmad Faisal, Pertamina director for marketing and trading, said that consumption of Premium gasoline had reached 6.1 million kl in the first four months of this year from an estimate of 16.9 million kl, kerosene 2.9 million kl from an estimate of 7.5 million kl and diesel 3.7 million kl from an estimate of 10.9 million kl.
Downstream oil and gas regulator BPH Migas said that over the past five years the consumption of Premium gasoline had risen by 5 percent per year due mostly to the rapid increase in vehicles.
Finance Minister Sri Mulyani Indrawati said fuel subsidies could rise in line with the increase in consumption, and that the government would be able to cover subsidies as high as Rp 132.1 trillion (US$14.3 billion).
In a bid to keep the state budget in check, the government has been trying to control fuel consumption to stabilize the budget even as oil prices hover above $120 a barrel.
In addition to increasing the fuel prices, the government has embarked on a programs to replace kerosene with liquefied petroleum gas (LPG) and limit the sale of subsidized fuels with the distribution of "Smart Cards" to motorists and public transportation operators.