Hans David Tampubolon, Jakarta – Earlier this year, the government framed its plan to implement a fuel-to-gas energy conversion program as the answer to the country's growing dependency on fuel consumption.
The idea behind the program was to significantly reduce the fuel subsidy by converting energy usage to gas, which is cheaper and abundantly available in Indonesia. By cutting the fuel subsidy, the government planned to reallocate some of its resources for infrastructure development.
To implement the program, the government set aside Rp 1.8 trillion in the 2012 state budget to build 33 gas fuel stations (SPBG) and to procure around 14,000 converter kits.
This firm commitment to allocating a budget for the program, however, has not been firmly followed up by the government itself. The year is almost at an end and the tender for the procurement and the development of the SPBGs have not been completed. Instead of evaluating what went wrong, government officials then busied themselves with pointing fingers at each another as to who was responsible for the failure of the conversion program.
Deputy Energy and Mineral Resources Minister Rudi Rubiandini said in November that the conversion program could not be implemented this year because the Finance Ministry refused to disburse the budget allocation.
Rudi added that the Finance Ministry also refused to accept the Energy and Mineral Resources Ministry's proposal to re-classify the program as a multi-year program.
On the other hand, the Finance Ministry refuses to be blamed for the conversion program failure. Finance Ministry budgeting directorate general Herry Purnomo said the main reason for the program failing was a lack of preparation and planning from the Energy and Mineral Resources Ministry.
First of all, Herry said that the Energy and Mineral Resources Ministry had been late in issuing an assignment letter authorizing state-owned oil and gas company PT Pertamina to conduct the conversion program.
"The assignment letter was issued in August while it takes at least seven months to build the needed infrastructure for the program. So basically, the implementation of the program will not be completed within the 2012 fiscal year," Herry said on the sidelines of a seminar in Nusa Dua, Bali, on Wednesday.
Herry added that the Energy and Mineral Resources Ministry then tried to propose the conversion program to be re-classified as a multi-year program because it would not be possible to complete it in 2012.
"We couldn't do that because the fuel-to-gas conversion program is not determined as one of the government's multi-year programs in the 2012 state budget," Herry said.
A University of Indonesia energy expert, Kurtubi, said the government's failure to implement the conversion program was a major setback that would hurt the country's future infrastructure development.
"If only the government was able to convert around 50 percent of the vehicles to use gas instead of fuel, we could save at least Rp 100 trillion [US$10.4 billion] of fuel subsidies per year and use it for infrastructure," he said.