SBY announces steps to reign in fuel consumption

JAKARTA. President Susilo Bambang Yu-dhoyono unveiled on Tuesday the government’s five-pronged approach to cutting fuel subsidies and controlling energy consumption by adopting a digital surveillance system to record the daily fuel consumption of all vehicles.

Yudhoyono said the government would first introduce a sophisticated distribution control system at every fuel station. He said the system would require every vehicle to be electronically registered, including its ownership and physical data, and to be monitored at all times.

“With that mechanism, we can ensure that the consumption of subsidized fuels can be controlled transparently and accountably. We can also minimize the risk of misappropriations of fuels,” Yudhoyono explained.

The second approach, he said, entails a ban on all vehicles owned by government institutions, state-owned enterprises and regional enterprises from using subsidized fuels. Special stickers will be affixed to each vehicle to signify that they are not eligible to buy such fuels.

Third, vehicles owned and operated by mining and plantation companies would also be prohibited from buying subsidized fuels. Special stickers would also be attached to these vehicles. Downstream oil and gas authority BPHMigas would team up with the police and regional administrations in tightening control over the distribution of subsidized fuels in mining and plantation areas, he said.

“Fourth, we agree to implement the oil-to-gas conversion program, particularly in the transportation sector. Our national priority is to curb our dependence on oil-based fuels,” Yudhoyono said.

He revealed that this year, the government would set up 33 new gas stations and revitalize eight existing stations as well as distribute 15,000 free converter kits to public transportation vehicles that would allow them to use gas-based fuels.

According to BPHMigas, in the first quarter of this year, the consumption of subsidized fuels in 16 provinces nationwide exceeded the allotted quota.

The agency calculated that if the government took no measures to control the distribution of subsidized fuels, consumption might hit 47.06 million kiloliters by the end of the year, surpassing the previously established quota of 40 million kiloliters. However, it expected that immediate government programs to curb consumption, may reign in quota overruns by nearly 3 million kiloliters.

The fifth policy element announced by Yudhoyono was to improve efficiency in the use of electricity and water by central and regional government institutions, including by state-owned enterprises. In addition to the five policies, he also confirmed the government’s commitment to providing more natural gas for domestic users in order to boost the growth of industry.

Yudhoyono also unveiled for the first time his plan to provide fiscal incentives for hybrid and electric vehicles. Previously, State-Owned Enterprises Minister Dahlan Iskan revealed that the President had commissioned research by top universities to examine the feasibility Indonesia producing its own electric cars.

Yudhoyono said that promoting a transportation system that is less dependent on the oil-based fuels was necessary in order to salvage the country’s budget, which had long been plagued by the heavy burden of fuel and electricity subsidies.

“By providing incentives, we hope that the prices of hybrid and electric vehicles can be more competitive and affordable,” he said. (Bagus BT Saragih and Rangga D. Fadillah/ The Jakarta Post)