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Government owes Pertamina Rp96.5t for three years of fuel subsidies

Jakarta Post - June 30, 2020

Norman Harsono, Jakarta – The government has yet to compensate state-owned oil and gas giant Pertamina Rp 96.5 trillion (US$6.8 billion) for fuel subsidies given to the poor from 2017 to 2019.

Rp 20.79 trillion was from 2017, Rp 44.85 trillion from 2018 and Rp 30.86 trillion from last year, Pertamina president director Nicke Widyawati told members of the House of Representatives Commission VI overseeing business on Monday.

The government is close to disbursing Rp 45 trillion in compensation to the oil and gas firm this year, covering 47 percent of the company's total receivables, while the remainder will be paid from 2021 onward. The funds have been audited by Supreme Audit Agency (BPK) and the Finance Ministry, according to Nicke.

"It just needs to be paid," Nicke said.

The compensation is urgent for Pertamina's financial wellbeing as the company faces a "triple shock" of low crude oil prices, falling fuel demand and a weak rupiah-dollar exchange rate because of the COVID-19 pandemic, the president director added.

Pertamina has revised down its growth projections for this year amid large-scale social restrictions (PSBB) imposed to contain the disease. The government has been gradually reopening the economy even though more than 55,000 positive cases have been recorded as of Monday.

The government compensation to Pertamina is part of a larger billion dollar compensation plan for big state-owned enterprises (SOE), from a chunk of the government's allocated Rp 695.2 trillion spending to fight the impact of the outbreak.

"The government has liabilities to SOEs that amount to Rp 108.48 trillion," SOE ministry spokesman Arya Sinulingga said on June 5.

Of the figure, state electricity firm PLN is owed Rp 48.46 trillion, while state railway operator Kereta Api Indonesia (KAI) is owed Rp 300 billion.

House Commission VI deputy chairman Aria Bima, an Indonesian Democratic Party of Struggle (PDIP) politician, said on Monday that commission members would help push the government to compensate Pertamina.

"We hope Pertamina may continue its public service obligations," he said.

Source: https://www.thejakartapost.com/news/2020/06/30/govt-owes-pertamina-rp96-5tfor-three-years-of-fuel-subsidies.html