ارائه دسترسی به انرژی پاک در اندونزی از طریق ابرپروژه تبدیل نفت سفید به گاز مایع

In 2007 Indonesia undertook a massive energy program to convert its primary cooking fuel from kerosene to LPG in more than 50 million households. This megaproject, to be completed in late 2011, provided an improved household cooking fuel, with its associated benefits in user costs, cleanliness, convenience, and environment, and reduced the government's huge subsidy for petroleum fuels. Presented from the perspective of Pertamina, Indonesia's sole NOC, and the program implementer, this paper describes the background of the fuels situation, the planning stages, including the preparatory analytical work, targeted market surveys and tests, and the subsequent building of the financial, technical, and institutional models for carrying out the program on an expeditious schedule. It presents the project's major execution steps, results of the program to date, and the unique institutional roles of each party, including the activities and benefits for the government, Pertamina, the public, the industry, and the crucial agents in the fuel supply chains. Finally there is a retrospective policy analysis and a discussion of key factors and challenges in the execution of Indonesia's largest-ever energy initiative to provide improved cooking fuel.

1.1. The situation before the program of kerosene conversion to LPG Kerosene, the main fuel for households and transportation, has been subsidized for decades by the Government of Indonesia (GOI) (Said, 2000). However, because of the increase in population and oil price, this subsidy has become a huge burden for the government. Table 1 shows that the subsidies from 2001 to 2008 were very great, ranging from 9% to 18% of total state expenditures. Compared to total GDP, the petroleum fuels subsidy ranged from 1.9% to 3.7%. These subsidies peaked in 2008 when the price situation gave additional momentum to the program and an opportunity to test its benefits.Furthermore, the subsidy for kerosene became the largest contributor among the petroleum products (Fig. 1). In 2006 and 2007 before the conversion program was launched, the subsidy for kerosene was 57% and 48%, respectively, of the state's total petroleum product subsidy. Meanwhile, the policy to reduce the petroleum fuel subsidy by increasing the kerosene price became an increasingly sensitive social issue with a potential to disturb state stability. In summary, modern Indonesia is highly dependent on petroleum fuels, including kerosene, and for many years these fuels have been a huge burden on the state budget. Indeed, elimination of energy subsidies has been one of the most crucial economic and social problems facing Indonesia (Foell, 2004).Reacting to this heavy burden of subsidy, government and parliament agreed early this decade to initiate attempts to reduce petroleum fuel subsidies. Initial focus was on industrial fuels, since this sector had the highest capacity to react efficiently to higher prices. This program had considerable success, particularly in years after 2005, when subsidies for diesel, industrial diesel oil (IDO), and marine fuel oil (MFO) were greatly reduced by pricing them at international prices (Singapore spot market—Mid Oil Platts Singapore). There is now open market competition with four big players: Pertamina, AKR, Shell, and Medco. One negative impact of subsidy removal was price disparity between economic prices for industry and subsidized prices, mainly for the kerosene that was primarily intended for the household sector. This price disparity increasingly triggered unintended misuse of subsidized fuel, e.g., industry mixing it for use in industry or smugglers exporting it and reselling at a much higher price. This negative impact is a major incentive for the government to develop initiatives for reducing oil consumption and, more specifically, to establish the Kerosene Conversion to LPG Program as one of its biggest efforts. 1.2. Subsidy and the demand for kerosene Based on 2004 data from the National Statistics Office (Badan Pusat Statistik, 2004), kerosene is consumed by 48 of 52 million households. The majority of Indonesians use subsidized petroleum, depend heavily on it, and have used kerosene in the household for many decades. The majority are housewives using it for daily cooking. Most have a low-to-medium income, under USD 150 per month. In addition, a much smaller portion of kerosene is used as lighting fuel by households, fishermen, and small industries. From government's perspective, fuel subsidy has a very big role in the state budget. Fig. 2 shows a greatly increased kerosene subsidy from 2001 to 2006, despite the parliamentary-imposed quota on the volume of usage. The main factor in this increase was the trend of increase in petroleum prices. The huge subsidy provided a strong incentive for establishment of the kerosene conversion program to significantly reduce the petroleum subsidy. In fact, in 2007 and 2008 when the program began, the volume was decreased drastically but the subsidy still increased because of increase in international oil price. This volume decrease continued in 2009, as explained in Section 4.1.3. Why was LPG chosen as the conversion fuel LPG was selected for the following reasons: (1) Replacing kerosene with LPG as primary household cooking fuel would greatly reduce the fuel subsidy. Based on the end-use calorific value of energy delivered for cooking, and the subsidy per unit of fuel, the LPG subsidy is significantly lower than that of kerosene. The parameters in the table below show that based on end-use “energy equivalence”, 1 l of kerosene equals 0.57 kg of LPG (Table 2).However, research by Universitas Trisakti (University of Trinity) in Jakarta and the State Ministry for Women's Empowerment, including laboratory experiments under various cooking conditions, indicated that usage of 1 l of kerosene equals 0.39 kg LPG. Because of the high credibility of the laboratory, which made these measurements, this energy equivalence value was used by Pertamina in its design and analysis of the kerosene conversion program. When one takes into account the “misuse” of subsidized kerosene, i.e., for non-household purposes such as industrial fuel mixing, the effective equivalence value of kerosene would likely be even lower (see Section 4.2.1). This 0.39 kg value is used in the subsidy calculations below (Table 3) where the annual subsidy saving is shown for 2006, the year before the program was initiated. Based on the year 2006 calculation, the savings would be 2.17 billion USD annually after completion of the program, it's a significant fraction of the state budget.LPG is cleaner than kerosene. Many studies worldwide have analyzed advantages and disadvantages of various household cooking fuels, e.g., Ezatti (2004), Siyanbola et al. (2004), and Smith et al., 1993 and Smith et al., 2000. LPG has the following advantages compared to many other traditional fuels: • improves health for the many poor people directly affected by indoor pollution from household fuels; • reduces emissions of greenhouse-related pollutants compared to solid fuels, such as biomass and coal in traditional stoves; • reduces pressure on natural forests in some parts of the globe (although it is not known exactly what percentage of wood fuel is harvested non-renewably); • increases availability of agricultural wastes for soil enhancement and other purposes in some regions; • eliminates time and labor devoted to gathering biomass fuels and reduces efforts devoted to cooking and cleaning, potentially benefiting women and children. If compared specifically to kerosene, LPG has the following disadvantages and advantages as shown in Table 4:LPG has the most readily implemented infrastructure compared to other alternatives such as coal and natural gas. For urban populations, natural gas (supplied by PGN, the National Gas Company) and electricity are alternatives to kerosene, each having pros and cons. However in rural areas, where PGN has not yet extended its distribution system to most villages, natural gas is not available. Although there has been considerable progress in development of solar and biogas systems, they are not yet widely and commercially developed for household use in Indonesia. In contrast, LPG container filling and distribution technologies have long been available in many countries. The use of LPG 12 or 3 kg cylinders can offer a ready and attractive energy source for many households (e.g., Pertamina, 2008). (4) Subsidized LPG programs have been successfully implemented in neighboring countries such as Malaysia and Thailand. In Malaysia, LPG subsidy has long been implemented under a system called “Automatic Pricing Mechanism” (APM). In addition to LPG, APM is also used to control and determine retail prices for unleaded gasoline and diesel. The principle of APM is that the consumer retail price is specified by the Malaysian government, enacted uniformly within specific geographical areas, and used by all oil companies in managing their businesses (Petrolworld, March 2, 2009). In Thailand, the government applies an LPG subsidy system for households only. Until 14 November 2001, retail prices for the end-use costumers were regulated by the Thailand Government. Since 15 November 2001, the government regulates the prices only at wholesale depots; the retail price is determined by LPG distributors and sellers (The Energy Policy and Planning Office, 2001, Ministry of Energy, Bangkok). 1.4. Objectives and structure of this paper This paper is presented from Pertamina's perspective as the sole body appointed by the government to implement the program. It attempts to provide a frank and accurate picture of the efforts of Pertamina and the government to make the program successful, including strengths and inadequacies in those efforts. The paper first describes the background of the fuels situation, the preparation and planning stages, including the preparatory analytical work, targeted market surveys and tests, and the subsequent building of the financial, technical, and institutional models for expeditious program execution. Subsequent execution steps, progress to date, and the unique institutional roles of each relevant party are described, including government, Pertamina, the public, industry, and crucial agents in previous (kerosene) and new (LPG) fuel supply chains. Program benefits to each party are also discussed, as well as major challenges faced by Pertamina. Key among these are positive financial benefits to both government and end users of energy. Finally there is a retrospective policy analysis, discussions of key factors in execution of Indonesia's largest-ever energy initiative to provide improved cooking fuel, and continuing challenges faced today.

With an urgent need to reduce subsidy, GOI launched this program quickly. In terms of investment capital, the project was not extraordinarily large, but was of extremely large scale throughout the entire country and socially very risky. The strong role of prominent leaders in central government, supported by relevant ministries, is a key factor in this program's success. One important indicator is the financial return even before program completion. Capital investment of USD 1.15 billion yielded a subsidy saving of USD 2.94 billion within the same year. (2) The program is run using a business model executed by a business entity deemed capable of executing it. Indonesia has an advantage with a sole NOC as “the leverage arm” of the Government. It used this leverage in an attempt to maximize the role of private institutions, particularly those already participating in the previous commercial system and those effective in gaining societal support. The short lead-time and program speed had a negative impact on development of needed capacities, and this should be improved in the future. (3) Using a strong social approach, all phases of the implementation model can be replicated quickly and efficiently in other conversion areas throughout the country. This ranges from coordination with local governments to withdrawal of the existing fuel. Rapid program execution requires post-program socialization to increase societal awareness. (4) The program was beneficial to a wide range of parties, including government, national industries, and end users. However, it required extra efforts to convert the distribution chain, and it increased the market risk of competition.