MOSCOW (MRC) -- Indonesia's government has asked state energy firm Pertamina to limit its sales of subsidized fuels so as not to increase pressure on energy subsidies, said Hydrocarbonprocessing.
Indonesia has jacked up its energy subsidies this year to 502 trillion rupiah (USD34 billion), aiming to keep prices of some fuels and power tariffs unchanged amid rising global energy prices and the rupiah's depreciation. This has helped keep inflation in Southeast Asia's largest economy relatively low, at 4.94% last month. The central bank has also said this provided it with room to delay rate hikes.
The subsidy budget assumes sales of subsidized diesel for the entire year will reach 15.1 kiloliters, and sales of subsidized gasoline at 23.1 kiloliters, but current sales volume has already reached around those levels, said Isa Rachmatarwata, budgeting director general at the finance ministry. "That's why I have asked Pertamina to control (sales volume) so that the state budget will not face additional pressure," Sri Mulyani said in a news conference.
Pertamina plans to limit subsidized fuel sales by making consumers register their vehicles digitally so the company can identify whether subsidies have reached intended recipients, its trading unit Pertamina Patra Niaga's Corporate Secretary Irto Ginting told Reuters. However, Pertamina is still waiting for government rules on fuel sales and distribution, Ginting added.
Economists have criticized the government's decision to upsize subsidies this year, saying this would take money away from projects with bigger economic impacts. Said Abdullah, head of parliament's budgetary committee, said the government and parliament are set to discuss the effectiveness of subsidies.
As per MRC, PT Pertamina said it will jointly study carbon capture technology at its refinery in Balikpapan with a local unit of French gas company Air Liquide. Pertamina and Air Liquide Indonesia, signed a joint study agreement on capturing carbon emissions from its Balikpapan hydrogen production facility and storing the carbon in the Kutai basin area off East Kalimantan province.