BPH Migas claims 10-15% of subsidized fuel is sold illegally

BPH Migas, Indonesia’s downstream regulator, states that between 10% and 15% of subsidized fuel distributed by the government is being illegally sold to industries and retailers. Adi Subagyo, a BPH Migas committee member, said the growing price differential  between subsidized and non-subsidized fuel is causing a rise in incidents.  In 2011, there were 159 cases involving illegal sales of subsidized fuel.  Trying to prevent the illegal diversion of subsidized fuel has prevented Indonesia from being able to stay within its annual subsidized fuel quota.   This then compounds pressure on the state budget, which has already allocated 187.6 trillion rupiah (US$22 billion) for fuel subsidies. (June 1, 2011)