Govt Plans to Ban Private Cars From Using Subsidized Fuels

Jakarta, The government plans to ban all private cars from using subsidized fuels as part of efforts to cut fuel subsidy.

In its document made available on Monday, state oil and gas company Pertamina said the plan was approved at a meeting of the Coordinating Ministry for Economic Affairs on Nov 23.

The document is Pertamina`s reply to questions raised at a hearing between the House of Representatives Commission VII and Pertamina President Director Karen Agustiawan on Monday.

The Nov 23 meeting focused on two options to cut subsidized fuel consumption. The first option calls for the sale of subsidized fuels only to public vehicles, two-wheeled vehicles and three-wheeled vehicles, while the second option allows the sale of subsidized fuels only to public vehicles, two-wheeled vehicles, three-wheeled vehicles and vehicles produced before 2005.

"The meeting decides to choose the first option," the document said.

The government will discuss the plan to limit the use of subsidized fuels with the House Commission VII later this week and hopes it can be implemented early next year.

Pertamina has projected subsidized fuel consumption this year to reach 38.379 million kiloliters, higher than the quota of 36.5 million kiloliters set in the revised 2010 state budget.

Pertamina Marketing and Commercial Director Djaelani Sutomo said at the working meeting with the House Commission VII on Monday the 2010 subsidized fuel consumption forecast consisted of 23.129 million kiloliters of gasoline, 2.389 million kiloliters of kerosene and 12.859 million kiloliters of diesel oil.

Djaelani said subsidized fuel consumption in the year ending on November 23, 2010 reached 34.103 million kiloliters consisting of 20.449 million kiloliters of gasoline, 2.142 million kiloliters of kerosene, and 11.512 million kiloliters of diesel oil.

"The quota of subsidized diesel oil in the revised 2010 state budget has been entirely used and the quota of subsidized gasoline is expected to be reached this week. The quota of subsidized kerosene is still available due to the kerosene-to-gas conversion program," he said.

Indonesia`s fuel subsidy has been projected to reach around Rp89 trillion in 2010, more than 10 percent of the country`s tax revenue.

Pertamina said last June the country`s consumption of subsidized fuels may rise by 6 percent to 42.5 million kiloliters next year as economic expansion boosts vehicle sales.