F lorence Sihombing (26) , a graduate student of law at the prestigious Gadjah Mada University, the August 27 drove his white Honda Scoopy motorcycle at a gas station Pertamina. The queue for motorcycles was longer than usual, she tried to use one of the rows of pumps reserved for cars that buy non-subsidized fuel. An officer ordered him to get into the queue for motorcycles. Irritated, she drove away, and then posted on its Path account: "Jogja is poor, stupid and uneducated Friends in Jakarta - Bandung, do not visit Jogja."
The woman from the capital of North Sumatra Medan describes Jogjakarta people as "bastards" because of class discrimination against motorcycle users, who tend to be lower income. employees that car owners.
Flo thoughtlessly encouraged his friends to "re-Path" his diatribe and it went viral. Local groups he reported to the police and she was arrested on August 30. She was released two days later, after UGM promised she would cooperate with the police.
media attention his case was diverted when the Minister Jero Wacik energy was September 2 named a suspect for alleged corruption on extortion and kickbacks. the ensuing investigation is expected to lift the lid on some of the graft that has long marred the oil sector in Indonesia.
Jero Wacik
tHE LURE oF BLACK GOLD
Oil had for centuries seeped naturally from the ground in northern Sumatra, where it was used as a medicament for diseases of the skin, for caulking boats, fuel, and for the manufacture of explosives.
The history of the oil industry in Indonesia in 1883, when oil was discovered north of Medan, leading to the formation in 1890 of the Royal Dutch Petroleum Exploration Company. In 1907 the company merged with Shell Transport and Trading Company Great Britain, the creation of the Royal Dutch Shell group, which dominated the colonial oil exploration. In three years, the new company was operating concessions in Sumatra, Kalimantan and Java, which represents about 4% of global oil production.
The Dutch East Indies oil fields was important for Japan, especially during World War II. In July 1941, the Netherlands have joined a US and British embargo on oil sales to Japan, who suddenly lost access to 88% of its imported oil. Five months later, Japan invaded in his quest for natural resources. In Kalimantan, retired Dutch engineers have destroyed a refinery in Balikpapan. Japanese forces responded with a massacre.
After Indonesia gained its independence, the army in 1957 began to take on local Dutch oil companies, which were then nationalized by the administration of President Sukarno. In 1962, Indonesia has joined the Organization of Petroleum Exporting Countries (OPEC).
The investment climate improved after Suharto took power in the mid-1960s state oil companies were merged in 1968 as Pertamina, which has made little exploration and drilling, but rather issued sharing production contracts to foreign companies. Pertamina has become main cash cow of the regime. Transparency and accountability are not its strengths.
The Duri and Minas oil fields in Sumatra Riau Province were discovered by Caltex in the early 1940s, although production did not begin until 1954. In the 1960s, they provided 50% of the country's oil production.
Pertamina profited handsomely from the oil crisis of 1973-74 when world prices have quadrupled. Unfortunately, the head of the company, Ibn sutowo used the profits to speculate in other sectors. In 1976, his mismanagement has led Pertamina accumulate debts of $ 10.5 billion.
In 1977, Indonesia oil annual production peaked at about 1.6 million barrels per day. Some children and cronies of Suharto received concessions intermediaries between Pertamina, customers and suppliers. Mark-ups have generated huge profits. Such arrangements were supposed to have been disbanded after the 1998 fall of Suharto. An audit of Pertamina recognized losses of $ 6 billion over 1997-1998 due to inefficiency and corruption. If only these funds were allocated to discover and exploit untapped reserves, and develop refining capacity and Indonesia could have avoided the drop in production and expensive fuel imports.
As old fields have matured, Indonesia in 2004 became a net oil importer. Pertamina has lost many monopolies in 2004-2010, leading foreign companies are allowed to sell fuel. In 2008, Indonesia withdrew OPEC can not meet production quotas, while the world price of oil rose above $ 140 per barrel.
In 2013, on average the Indonesian oil production 825,000 barrels per day. Production this year should be even lower. Pertamina currently imports about 600,000 barrels per day to meet domestic demand.
GRANTS SENSITIVE
Indonesia Fuel prices have been funded since the Sukarno presidency, ostensibly in order to make life easier for poor countries. Yet the cheap fuel has benefited disproportionately high incomes.
Cutting subsidies is a politically sensitive issue. the fuel price increase contributed to the demonstrations that toppled Suharto after 32 years in power. In 1999, fuel subsidies accounted for almost a quarter of the state budget. Despite some cuts over the past 15 years, the subsidies in 2013
Royal Dutch Petroleum dock in courtesy of the Dutch Indies of Collectie Tropenmuseum
still consumed 19.5% of the budget - about $ 25 billion. Reducing subsidies, more money can be allocated to vital infrastructure, health and education.
supply of gasoline this year problems occurred after the government in June cut the fuel consumption of subsidized quota of 4.2% to 46 million kiloliters. This meant Pertamina had to reduce its daily distribution of petrol subsidized by about 5% and diesel by 10-15% in stations across the country. The shortages prompted panic buying in many stations.
President-elect Joko 'Jokowi' Widodo inherit a growing budget deficit and is under pressure to cut fuel subsidies in its first 100 days in office. His political opponents could use the cuts as a pretext to orchestrate protests against him.
FUEL IMPORTS OF MAFIA?
crude oil and fuel Indonesia's purchases are handled by the trade subsidiary of Pertamina Petral. There has long been claims that fuel imports were dominated by intermediate "fuel mafia" which increases the cost of each barrel to around $ 10. - And the profits are assumed to be widely shared, so that the system continues unopposed
A group called People's Solidarity Special for oil and recently accused the presidential candidate Hatta Rajasa gas failed, the former chief minister of economics, participation in the "mafia fuel ". Hatta denied any wrongdoing.
Ferdinand Hutahaean, coordinator of the group, said Tempo magazine that Indonesia could be losing $ 9 million a day because of the increases. He alleged that Hatta ten years was associated with Riza Chalid, the boss of world energy resources based in Singapore which has brokerage deals with Pertamina. Globe Asia business magazine described Chalid as "one of the most under the radar oil businessmen in Indonesia."
respected president of Pertamina Karen Agustiawan resigned in August for "personal reasons" following reports that she had been under pressure to divert funds to corrupt legislators. She denied making payments.
Jokowi said the Department of energy is very involved with the mafia and requires better leadership. There are great expectations for the new president to clean up the oil industry, but if it does not receive the support of a majority in parliament, it may be unable to pass the reforms needed to eliminate costly red tape and other obstacles to investment. Motorcyclists and similar petroleum investors will remain patient.