State-owned Oil and Gas Company Pertamina is expected to import 588 thousand tons of liquefied petroleum gas (LPG) in the 2016-2017 period to reduce scarcities of gas supplies in a number regions.
A number of regions in the country have been running short of LPG supplies since early this month, particularly in the face and after the post-fasting Ied Fitr festivities, or Lebaran. Scarcities of gas are among others found in the provinces of Bangkulu, Central Sulawesi, Southeast Sulawesi and Central Java.
Pertamina will increase its supplies to regions facing shortage of LPG. In Pekalongan District, Central Java, for instance, the state-owned oil and gas company will supply 841 thousand cylinders of gas in the three-kilogram (kg) size, up by 10 percent from the previous quota of 756,900 cylinders.
"Pertamina will increase the LPG quota for Pekalongan by 10 percent to 841 thousand cylinders," LPG Sales Executive Officer of Pertamina for Central Java, Sulystya Adhi said on Friday (15/7/2016).
The consumption of liquefied petroleum gas (LPG) in the three-kilogram (kg) cylinder category increased by seven percent during the post-fasting month Lebaran festivities compared to regular days in Central Java and Yogyakarta.
The sale of LPG in the three-kg cylinder category rose to 3,159 metric tons (MT) per day from the average of 2,961 MT, Pertaminas area manager of communication and relations for the Central Java-Yogyakarta marketing operation region, Suyanto, stated meanwhile on Friday.
The consumption of LPG in the three-kg cylinder category also rose by six percent as compared to the daily average of 3,141 cylinders recorded three days earlier, he revealed. In Mukomuko District, Bengkulu province, household consumers have over the past three days faced difficulties in buying gas of the three-kg cylinder category.
"We have faced scarcities of gas supplies in three-kilogram cylinder category in the past three days," Yadiris, a gas consumer said in Mukomuko on Saturday.
He said shortage of gas happened after the Lebaran festivities. Because of the shortage, the price rose. "It has increased from Rp24,000 to Rp27,000 per three-kilogram cylinder."
Gas of the 3-kg category also disappeared in Palu City, Central Sulawesi, after Lebaran. "None of the gas distributing kiosks now sells 3-kg gas cylinders," said Darmaris Sampe, a household wife on Saturday. Several days before Lebaran, the local government and Pertamina organized gas market operations as gas prices rose from the regular price of Rp16 thousand to Rp30 thousand per cylinder.
Local legislator H Alimuddin Alibau said on Wednesday that the local government should overcome the problem of gas shortage soon. The subsidized 3-kg gas has run short for one week.
"The local government should interfere in solving the problem. This is the responsibility of the local government," he said.
The same shortage also took place in Southeast Sulawesi province. Housewives have to visit one by one the gas dealer kiosks to find the 3-kg gas. "I have not made any anticipation and gas cylinder reserves because I did not think that gas would run short. I have visited many distributors on Tuesday (July 5) but found no one," housewife Desi said.
Legislator Rofi Munawar of Commission VII on energy affairs of the House of Representatives (DPR) has earlier called on the government to maintain LPG and fuel oil stock stability during the Lebaran season.
"The government has stated in various occasions that it was ready to face the Lebaran festivities and anticipate any scarcities," said Rofi in a press statement on Saturday (July 2).
The Energy and Mineral Resources Ministry (ESDM) will therefore give priority to the distribution of subsidized gas in the 3-kilogram cylinder category to the household and small and medium-scale enterprises (UMKM) consumers.
"This year, we subsidize household and UMKM consumers, Others, like restaurants and hotels should consume the non-subsidized one in the 12-kg cylinder category," I Gusti Nyoman Wiratmaja, the director general of oil and natural gas of the ESDM, said on Thursday (July 14).
To buy the subsidized gas, the household and UMKM consumers would later be required to use electronic cards that record the gas transactions of consumers at gas distributor kiosks. Not all consumers would be provided with the cards to prevent the subsidized gas from getting off the target.
The director general said that the government would do its best to provide electronic cards for needy household and UMKM consumers. "Now, we have not yet specified the needy consumers. The consumers are still in the criterion of households," he added.
The government will decide a quota trial system in the marketing of the 3-kg gas cylinder type in Tarakan, North Kalimantan next August. If it runs smoothly, the government will set a quota of three cylinders (3-kg gas each cylinder) for household consumers and 10 cylinders for UMKM per month.
In the meantime, in an effort to overcome shortage of gas supplies, Pertamina will import gas from Iran. The national Iranian Oil Company (NIOC) will supply Pertamina with 88 thousand tons of gas in 2016 and 500 thousand tons in 2017.
President Director of Pertamina Dwi Soetjipto said the MOU on the gas business deal is expected to be signed this month or next August. Both sides will carry out due diligence on oil and gas blocks in Iran.
"The MoU will be signed possibly at the end of this month. After the signing of the MoU, due diligence will be carried out, including evaluations on the (oil and gas) blocks. It will take about four to six months," Dwi was quoted as saying by Merdeka.com online media on Tuesday (July 12.)
He said that Pertamina will import crude and liquefied natural gas from Iran because the prices of the products are lower in that country with a cost production of only about US$10 per barrel.
"We see that the prices of many products there are relatively lower, such as LPG, crude, condensate and others. Besides upstream business, trading could also be developed," the Pertamina president director added.
Earlier, Pertamina Vice President Corporate Communication, Wianda Pusponegoro, said the first LPG delivery is targeted in the fourth quarter of 2016. "Two cargoes are expected to be delivered this year while 12 other cargoes will be delivered in 2016 so that in total it will reach 600 thousand tons," she said.
She said the need for LPG in Indonesia continued to increase from year to year. In 2016, Pertamina's LPG sales is expected to reach 7.5 million tons, up 13.6 percent from that in 2015. (Ant)