Government to Cut Kerosene Supply: Indonesia

In a Business News report it appears the government will start reducing the supply of kerosene next year in a bid to encourage households to switch to liquefied petroleum gas.

Currently the government is subsidising the fuel but it has become a budgetary burden and mainly due to the soaring international oil prices. Kerosene, which is the main fuel used for cooking by millions of Indonesian households, is significantly more expensive than LPG. And in a generous move the state oil and gas company Pertamina would be charged with supplying gas stoves to low-income households.

A majority of houses already use LPG and I can well remember seeing the truck pull up and the guy enter the house and take away the empty container replacing it with a full one. People hang signs on their gates informing the 'gas truck' driver they need a replacement. But it's not the householders that concern me but rather the kaki lima or street vendors. Kerosene has always been their main source of fuel for cooking and although it might be more expensive than LPG, it is inevitable that the cost of LPG will rise.

According to government sources the kerosene supply would be cut by 1.12 million kiloliters next year. The supply cuts would continue each year until a reduction of 10 million kiloliters had been achieved by 2012 and next year LPG supplies would be increased. The government would import the commodity if the domestic supply was insufficient to meet rising demand.

Surprisingly the government stated it would provide help to low income households for the purchase of LPG canisters. In these harsh economic times in Indonesia at the moment, I think the government should supply them free of charge.