Page 8 - AsianOil Week 40

AsianOil SOUTHEAST ASIA AsianOil
Pertamina urged to curb subsidised diesel sales
POLICY
THE Indonesian government has urged state- owned Pertamina to curb its sales of subsidised diesel as the government’s annual quota is set to run out before the end of the year.
The Jakarta Post quoted a letter from down- stream regulator BPH Migas as saying the com- pany had used 80.46% of this year’s 14.5bn litre quota in just nine months. BPH Migas added that only 73.42% of the quota should have been used in the January-September period.
“If there is no control of the diesel distribu- tion, the 2019 quota [may be exceeded] by up to 1.57bn litres,” BPH Migas wrote. If this happens, the government’s budget will be compromised.
Kuala Lumpur has already reduced this year’s quota from the 15.6bn litres it issued in 2018. While it did not exceed its volume target last year, the value of the subsidised diesels exceeded the government’s budget of IDR97tn rupiah ($6.85bn) by 207%.
Deputy Energy Minister Arcandra Tahar called for stakeholders to wait and see how Pertamina handled the potential oversupply
situation. “We will see. The quota is not fully used yet. We will see how it goes,” he said. Arcandra added that the government intended to introduce digital systems at the country’s fuel stations to ensure that only the intended buyers received subsidised diesel.
Pertamina’s corporate communication vice president, Fajriyah Usman, said the company would promote higher-quality, nonsubsidised diesel brands to ensure that it met the diesel dis- tribution quota.
BPH Migas had originally capped subsidised diesel sales to trucks on August 1, but the Indo- nesian Energy Ministry ordered the regulator to walk back the restriction on September 27 fol- lowing protests from trucking companies. The regulator had ordered sales of fuel to two-axle trucks be capped at 30 litres per day, while three- axle trucks could receive up to 60 litres per day.
At the time, the Indonesian Truck Business Association said: “The implementation of [the restrictions] will create chaos, unfairness and leaks in distribution networks.”™
EAST ASIA
India ups funding for Mongolian refinery
PROJECTS & COMPANIES
INDIA has agreed to provide an additional $236mn of financing for a refinery project in southeastern Mongolia, Indian Minister of Petroleum and Natural Gas Dharmendra Pradhan said this week.
Speaking at a commissioning ceremony for infrastructure facilities that will sup- port the refinery, Pradhan said on October 8 that India had extended the funding at the request of the Mongolian government. The money is in addition to the $1bn the South Asian country has already committed to the project, which is being built in the Altan- shiree district of Dornogovi Province near the provincial capital of Sainshand.
India’s state-owned Engineers India Ltd (EIL) is developing the 1.5mn tonne per year (30,000 barre per day) plant. The refinery – which is expected to produce 560,000 tpy of gasoline, 670,000 tpy of diesel and 107,000 tpy of liquefied petroleum gas (LPG) – is slated for completion by 2022.
Mongolia has nearly finished building 27 km of railway line, 17.5 km of road and 19 km of power line that will connect the refinery to existing networks.
Mongolian Prime Minister Ukhnaa Khurelsukh said: “Taking this opportunity, I would like to thank the Indian government and its people for helping Mongolia to build the [country’s] first oil refinery.”
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w w w . N E W S B A S E . c o m Week 40 09•October•2019