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Government agency fixes subsidized fuels allocation for 2020

Jakarta Post - December 31, 2019

Norman Harsono, Jakarta – The Downstream Oil and Gas Regulatory Agency (BPH Migas) has fixed next year's allocation of subsidized fuels at 26.87 million kiloliters (kL), up 3 percent from last year, following a meeting with House of Representatives members last week

BPH Migas said in a statement on Monday that next year's subsidized fuel allocation consisted of diesel (57 percent), gasoline (41 percent) and kerosene (2 percent). The fuels are respectively most used to power logistical transportation, private vehicles and rural cook stoves.

"We will tighten monitoring of fuel distribution in 2020," said BPH Migas head Fanshurullah Asa in Jakarta. "Why do we do so? It is to ensure that we do not exceed the quota."

He was referring to the fact that Indonesia exceeded its subsidized diesel quota in November this year for the first time in four years, according to BPH Migas records. The ballooning energy subsidy will weigh on the state budget.

Diesel subsidies alone might cost the state budget up to Rp 30.62 trillion (US$2.2 billion) next year. Such subsidies have been capped at Rp 2,000 per liter since the Energy and Mineral Resources Ministry issued Regulation No. 40/2018.

As decided in late 2017, state-owned oil company Pertamina and publicly listed fuel distributor AKR Corporindo are to distribute the subsidized fuels next year. The two companies are slated to handle distribution until 2022.

Source: https://www.thejakartapost.com/news/2019/12/30/government-agency-fixes-subsidized-fuels-allocation-for-2020.html