Pertamina's Hemorrhaging Pocket

Mohammad Afdal Bahaudin has revealed a series of losses worth trillions of rupiah. The Pertamina director of investment planning and risk management said the state oil and gas company was not breaking even in its programs of distributing subsidized fuel and non-subsidized gas.

By its calculations, as of July, Pertamina's losses from distributing subsidized fuel totaled some US$200 million or Rp2.3 trillion. "The fuel PSO (Public Service Obligation) is negative," Afdal announced at a discussion at the Ritz-Carlton Hotel in Jakarta on August 26. Under this government program, apart from being compensated for the subsidy, Pertamina is also paid a fee for distributing subsidized fuel.

September 16, 2014