Senin, 25 Agustus 2014

PANIC BUYING TRIGGERS LONG QUEUES AT FUEL STATIONS

 By Andi Abdussalam
          Jakarta, Aug 25 (Antara) - The government's move to restrict subsidized fuel sale to maintain quota, so that stock will not run out until the end of the year, has sparked panic paying and queues at refilling stations in several regions.
         "People have the impression that stocks of subsidized fuels are running out and that the government will raise fuel prices. This has triggered hoarding and panic buying," Ikhsan Modjo, a politician of the Democrat Party, told a TvOne Talkshow on Monday evening.
         Media reports have stated that President-elect Joko Widodo, popularly known as Jokowi, has plans to meet President Susilo Bambang Yudhoyono at the end of this month to discuss fuel oil subsidy reduction in the Draft 2015 State Budget.
         Fuel subsidies have so far been considered a burden to the state budget.
         "Yes, we want to obtain approval. We will hold a meeting first and then understand its calculation," Jokowi was quoted by Tempo.co as saying on Monday.
         Ikhsan Modjo noted that the rumor that fuel oil prices will be raised has resulted in panic buying and hoarding. He, however, categorically did not agree if the price of subsidized fuel will be raised.

 
         In the meantime, an oil observer, who is also National Democrat (NasDem) Party politician, Kurtubi said he will support the government's move to raise the price under certain conditions, such as banning the export and import of oil through third parties, resuming the fuel-to-gas conversion program, and developing gas stations along with refueling stations.
         "This should be done because the government's fiscal space is quite narrow," he pointed out.
         "The people are suffering from hardship because fuel sale restriction has narrowed the movement of their economic activities," Kurtubi said.
         However, according to state-owned oil and gas firm Pertamina's marketing and commercial director, panic has resulted from rumors of fuel oil scarcity. It has led to queues at fuel refilling stations (SBPUs) in several regions.
         "The situation is not because of fuel scarcity. There are queues at SBPUs because of panic buying," Hanung Budya said, adding that long queues had been triggered by misleading rumors being spread among the public.
         "The distribution of subsidized fuels at SBPUs has been arranged so as to adjust it to the prevailing quota," Hanung affirmed.
         In the meantime, Ali Mundakir from Pertamina reported on Sunday that there have been queues of customers wanting to buy subsidized fuels at SBPUs due to the distribution arrangement.
        "The queues have resulted in subsidized fuel running out at SBPUs, and it was not due to scarcity of stocks. It has happened because the volume of distribution per day is arranged to maintain the quota, so that it will not run out until the end of the year," Mundakir stated on Monday.
         He explained that the current fuel stocks are at a secure level and adequate to meet requirements until the end of this year.
         Ali revealed that Pertamina had been carrying out distribution arrangement on subsidized fuels since August 18 based on the daily average quota for every SBPU.
         The arrangement of subsidized diesel oil and premium gasoline distribution has been carried out to ensure that diesel oil and premium gasoline stocks will last until the end of 2014.
         The Revised 2014 State Budget stipulates that the subsidized fuel allocation should be reduced from 48 million kiloliters in the previous budget to 46 million kiloliters per annum.
         The government has raised fuel oil subsidy by 44.6 trillion from Rp246.5 trillion in the Revised 2014 State Budget to Rp291.1 trillion in the Draft 2015 State Budget.
         Ali explained that with the deduction of fuel quota, only two options will remain. The first option is to distribute subsidized fuels in a normal way, with the consequence that the stocks run out before the year end.
         The other option is to arrange daily distribution, so that the subsidized fuel quota will not run out before the year end.
         "With this arrangement, we hope that people who own private cars will be aware of the policy and begin consuming non-subsidized fuels," Ali added.
         The Downstream Oil and Gas Regulator (BPH Migas) had issued a circular on July 24, 2014, regulating that beginning August, 2014, the sales of subsidized premium gasoline and diesel oil will be restricted.
         The government, therefore, beginning early this month has restricted locations of refilling stations and time of transactions on subsidized diesel oil and premium gasoline.
         With effect from August 1, 2014, the government has banned the sale of subsidized diesel oil at fuel stations in Central Jakarta.
         From August 4, diesel oil can only be purchased between 6.00 a.m. and 6.00 p.m. in certain regions. The time restriction applies to the regions or provinces that are prone to crime.
         With regard to subsidized premium gasoline, the government has banned sale from fuel stations located at toll road sections beginning August 6, 2014.
         "From August 6, 2014, premium gasoline services by SBPUs in toll road sections will be abolished," Ibrahim Hasyim of BPH Migas stated.
         In response to the subsidy issue for fuel , Satya Widya Yudha of the House of Representatives (DPR) Commission VII on energy affairs stated that the next government should transform Indonesia's subsidized fuel policy because the current policy over the past several years has burdened state budget and narrowed fiscal space.
         "Some believe that the government's fiscal space in the budget is narrow. This is because the subsidized fuel paradigm has not changed--where adjustment is made through rising fuel prices--to providing subsidies to target people directly," Satya Widya Yudha said on Monday.
         He pointed out that the next government could have fiscal spaces to implement programs that had been announced by the president-elect. The government could save Rp200 trillion if it changes the fuel subsidy paradigm.
         "So, if it is converted to target subsidies, which have been proposed by the Golkar Party, the government will be able to save Rp200 trillion, which can be used for various expenditures," he asserted.
         Satya added that with target subsidy paradigm, the government will only focus on providing fuel subsidies to about 71 million people who deserve it based on data in the office of the Coordinating Minister for People's Welfare, while resuming its fuel-to-gas conversion programs. ***2***

(T.A014/INE)
EDITED BY INE
(T.A014/A/BESSR/A. Abdussalam) 25-08-2014 23:19:5

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