State oil and gas firm Pertamina exports subsidized fuel at market prices to East Timor each year. Customs suddenly put a stop to the practice.
For nearly three weeks, five trucks of state oil firm Pertamina heading for East Timor have been detained by the Kupang Customs and Excise office in East Nusa Tenggara. Customs officers have found that the subsidized Premium fuel was being sold under the name of Pertamax Regular, which is non-subsidized fuel. The officers detained the trucks because exporting subsidized fuel has been explicitly forbidden by presidential regulation No. 15, issued on February 7 this year. "The name [of the product being sold] is not in accordance with the product being sold," said Hendri Darnadi, chief of customs for Bali, West and East Nusa Tenggara.
Previously, Pertamina exported an average of 4,000 kiloliters of fuels, including Premium, diesel and avtur, to East Timor, monthly. Records show that the growth of fuel demands in East Timor reached 20 percent in 2011, while Premium fuel prices there reached Rp10,000 (US$1.09) per liter.
Also detained were six Pertamina tankers carrying Premium and diesel fuel as well as kerosene between January and April. They were transporting 7,378 kiloliters of Premium, 433 kiloliters of diesel, and 4,409 kiloliters of kerosene. The reason for the seizure was exactly the same: violation of the presidential regulation.
A Tempo source said that exporting to Timor-Leste was a matter vulnerable to politicization. The new presidential regulation does not mention subsidized fuel exports. The previous regulation, Presidential Regulation No. 55/2005, stated that subsidized oil exports were regulated by the Trade and Energy ministries. "Especially since there are long queues for subsidized fuel in several regions," the source said.
Hendri would later send a letter to Director-General of Customs and Excise Agung Kuswandono, questioning the license to export subsidized fuel. Agung responded and ordered Hendri to allow the Pertamina trucks to cross the border. Three days later the five Pertamina trucks in Atapupu and six tankers crossing Atambua were freed by Customs officers. Head of the Sub-Directorate of Action, Customs and Excise, Untung Purwoko on Agung's behalf asserted that Pertamina's fuel was now on its way to East Timor. "We're only carrying out the Trade Ministry's regulation," he said.
Agung's letter referred to a recommendation by the Director-General of Foreign Trade and Ministry of Foreign Affairs, Dedy Saleh. The recommendation stated that fuel from Pertamina destined for Timor-Leste was not banned from exports. The recommendation, Dedy added, was based on a meeting attended by representatives from the Directorate General of Customs and Excise; Directorate General of Oil and Gas, Energy and Mineral Resources Ministry; Foreign Affairs Ministry; Downstream Oil and Gas Regulator; and Deputy IV of State Intelligence Agency. "Everyone okayed the export approval letter," said Dedy.
Director-General of Oil and Gas Evita Legowo said that the decision to treat fuel for Timor-Leste as non-subsidized fuel was based on the collaboration aspect between both governments. "There is an agreement where we (the government) will assist Timor-Leste," she texted.
Vice President of Corporate Communication for Pertamina Mochamad Harun stated that the fuel sent to Timor-Leste included not just Premium, diesel, and kerosene, but also non-subsidized fuel such as avtur and Pertamax. The selling price of the exported fuel was based on international market price. "We sell Premium based on market price that is not much different from the Pertamax price," he said.
The fuel allocation for East Timor, added Harun, was separate from the subsidized fuel allocation. From 2003 to 2004 profits from fuel exports to East Timor reached Rp50 billion. "Today it will certainly be higher," he said. Sending fuel to East Timor started since the country that became free in 1999 was still a part of Indonesia. Pertamina, Harun added, was the only state-owned enterprise that succeeded in retaining its assets. "Other SOEs have been nationalized," he said. Today Pertamina still owns depots with a capacity of 6,000 kiloliters.
Harun said that business in Timor-Leste had been growing rapidly, a reason to retain those assets. "We don't want to sell them." Harun was of the opinion that if no fuel was sent, there was a possibility that they would be nationalized. "Building depots abroad is not easy, we must appreciate our friends who are hanging on there," he said. Harun was disappointed with the attitude of Customs officers who had suddenly decided to detain Pertamina's trucks and tankers. "There were no problems up till then," he said.
By Akbar Tri Kurniawan
No. 43/12, June 20, 2012
One of the five trucks detained in Kupang.