The New Chapter of One National Fuel Oil Price in Papua

After the establishment of the first gas station on August 17 of 2016 by Pertamina in Puncak Regency in Papua, now the joy of the Papuan people have been more and more elevated because since last Wednesday (9/11), the Minister of energy and Mineral Resources (ESDM), Ignasius Jonan has officially signed the ESDM Miniter Regulation regarding the One National Fuel Oil Price, which includes Papua. This Minister Regulation has become the next chapter of President Jokowi’s vision of the same fuel oil price for everyone in Indonesia, and of course, the one national fuel oil price in Papua.

In his statement to the press, this newly inaugurated minister (only several months ago) said that the uniform fuel oil price should be realized on 1 January of 2017. Therefore, the government and the Ministry of ESDM are currently still preparing everything that are needed for this program. One of the preparation is the regulating of Letter of ESDM Ministry Regulation regarding One national Fuel Oil Price that he has already signed.

 

the one national fuel oil price in Papua
The Papuan people happily buy the cheap fuel oil due to the one national fuel oil price in Papua via liputan.6.com

 

“We will wait for the follow up from the Minister of Law and Human Rights (Kemenkum HAM),” he said as cited from detik.com. Jonan said that, if the process in  Kemenkum HAM has finished, then his department will socialize the new Minister Regulation to private companies regarding the development of gas stations and seling fuel oil in remote areas such as the mountain areas in Papua.

What is the new Regulation?

Jonan affirms that the government does not wish to have only Pertamina to build gas stations and and sell fuel oil in Papua. The private companies should also participate in the development. How can the government invite the private sector to participate? The government will do so by “persuading” the private sectors with a new regulation that will benefit them.

The “persuasion” as cited by detik.com is in the form of high margin for the fuel oil distribution to challenging areas that are hard to reach. It is important to note, currently the margin for fuel oil distribution to big cities such as Jakarta and remote areas such as Yakuhimo Regency, are more or less the same, which is 300 IDR/liter.

Later on, Jonan explained, in the new regulation, the distribution margin for each area will differ. The margin for isolated areas for example, will be given higher margin compared to fuel oil distribution to big cities.

“In Papua, the fuel oil distribution margin is higher compared to Jakarta, hence it is more economical. Even if the sale volume in Papua is smaller, because the margin is higher than Jakarta, it would still be economical,” said Jonan.

The Private Sector is Obligated to Participate

However, there are still some parties that are concerned that the implementation of one national fuel oil price will cause profit loss to companies that build gas stations in remote areas, as explained by Suresh Vembu, one of the Directors of PT AKR Corporindo Tbk.

Suresh said that his company will build gas station in Papua or any other area as long as it’s profitable. “If it is not profitable, we will not build it. Therefore, for us, the decision is based on economical considerations,” said Suresh.

The concerns of the private companies, according to Jonan, can be overcome by allocating bigger margin, hence the private sector would still gain profit. Jonan does not wish to have this regulation to apply only to Pertamina. It should also apply to private fuel oil companies such as Total, Shell, AKR, Petronas, and so on. They should also open gas stations in remotes areas, and not in big cities only.

“It’s not gonna be for Pertamina only. It can’t only apply to Pertamina but also to all other fuel oil companies. Companies such as Total, Shell, AKR, Petronas are also obligated. How can the regulation be specifically made for state-owned company? he added.

For Papua it self, the One National Fuel Oil Price in Papua is of course something worth to be celebrated. It has been a long wait for the Papuan people to have the same access, in this case, fuel oil, as in the big cities and in Java island.

The government has been making steps and measures to fulfill the wish of the people with the one national fuel oil price in Papua. With this program, people in Papua can have cheaper fuel oil for a better life. This next chapter would further support the development in Papua, especially regarding the fuel oil that holds an important position in development and economy. 


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