Government Pays IDR 64.5 T Compensation, Strengthens Pertamina’s Cash Flow, and Protects People’s Purchasing Power
Jakarta, July 1, 2022 - The government’s full support for Pertamina makes distributing subsidized fuel and liquefied petroleum gas (LPG) easier. On Friday, July 1, 2022, Pertamina received an IDR 64.5 Trillion compensation payment from the government for 2021 subsidized fuel and LPG distribution.
Since the beginning of 2022, the government has accelerated the payment of compensation for the community’s subsidized fuel and LPG distribution. As of April 2022, the government has paid IDR 29.0 trillion in compensation. Thus, through 2022, Pertamina will receive IDR 93.5 trillion in subsidies and compensation from the government. This commitment shows the government’s efforts in strengthening Pertamina’s cash flow which will impact the national economic recovery and protect people’s purchasing power.
President Director of PT Pertamina (Persero), Nicke Widyawati, appreciates the compensation payment, which was paid earlier than scheduled. The payment will positively impact Pertamina’s finances in maintaining national energy security.
“Alhamdulillah. We appreciate for the government’s support through this compensation payment. This payment can strengthen cash flow to maintain national energy security. It is a form of sincerity and full support from the government to make Pertamina stronger to carry out the duties of the State in protecting people’s purchasing data from direct exposure to world crude oil prices,” Nicke said.
The support is also seen in the government’s policy through the Ministry of Finance to increase subsidies of IDR 71.8 trillion and fuel compensation of IDR 234 trillion. So that the total subsidies and compensation will be IDR 401.8 Trillion in 2022 (assuming Indonesian crude oil price / ICP USD 100 per barrel). It is an effort by the Government and Pertamina to provide and distribute subsidized fuel and LPG, which are needed by the poor, middle class, vulnerable, and MSMEs. It is also a form of the State being present to protect the community.
According to Nicke, the government’s efforts to face the extraordinary crude oil prices challenges, especially compared to other countries. It can be seen in Indonesia’s fuel prices, which are among the two lowest in the world. For the Indonesian government’s policy, the public needs to be grateful and be more frugal in using fuel & LPG. Subsidized fuel & LPG is only intended for the poor. Thus, the upper-class society must switch to non-subsidized fuel & LPG.
“Endless appreciation to the government because by increasing the allocation of fuel and LPG subsidies, the government has tried hard to maintain people’s purchasing power,”
For this reason, Nicke said Pertamina is motivated to continue various efficiency and breakthrough programs in all business lines that have been initiated. Thus through 2021, it generates US$ 1.3 billion in savings. According to her, the efficiency achievements are motivation and will continue in 2022.
Pertamina will make maximum efforts so that the subsidies allocated by the government for fuel and LPG in the 2022 State Budget can be utilized more optimally for people who need it and following the quota that has been set.
“Pertamina will carry out the mandate from the government by continuing to strengthen the fuel and LPG distribution to make it more targeted, among others, by registering vehicles on the MyPertamina website,” Nicke added.
However, Pertamina also encourages public awareness to use fuel and LPG responsibly and more efficiently. According to Nicke, the subsidy is a policy to ease the economic burden of the lower middle class, vulnerable to the poor, and MSMEs, so that people classified as capable should switch to using non-subsidized fuel and LPG.
“Community awareness is very much needed to help our community in need. And we will make sure the supply is sufficient. Supervision continues to be improved so that the fuel and LPG allocation subsidies are right on target,” Nicke concluded.**