Pertamina deficit presents new crisis

Achmad Nur Hidayat MPP
Achmad Nur Hidayat MPP, Public Policy Expert and Chair of the Center for Political Economy Studies at UPN Veteran Jakarta.

Pertamina’s fiscal deficit needs a systemic and integrated resolution, as the sensitive issue relates specifically to national energy security. The Government must collaborate and lead in solving the energy crisis, which will potentially grow harder in the future. The Minister of Energy and Mineral Resources, the Minister of SOEs and Pertamina must find ways to eliminate dependence on imports. 

Several creative ways of benefiting and appreciating the nation’s work to resolve Pertamina’s financial crisis would be to convert crude palm oil into gasoline, diesel, and avtur (aircraft fuel) to relieve Indonesia’s dependence on imports of fossil fuels. 

Surprisingly, the public has never heard of the Government’s other narratives of alternative sources of fuel. The Government must not be trapped by constant imports and its wild price swings. 

The Government must think about ways to be independent in creating sources of energy. If our country lacks the capital and capacity to invest in fossil fuels, switching to renewable palm oil would be better. 

Should the Government be willing to collaborate and determine an integrated strategy to use palm oil as an energy source and replace fossil fuels, the corporate fiscal deficit would be resolved in the next two to three years. Indonesia would sustain its independence, as palm oil is reliably renewable energy. 

Increasing crude oil prices will soar uncontrollably, potentially to USD 200 per barrel, which will seriously affect import costs, thus impairing Indonesia’s trade balance and current account, while disrupting the Rupiah exchange rate. Import dependence expands to affect various macroeconomic aspects. Thus, the state has had to develop domestic capabilities and eliminate dependence on fossil fuel imports. Being dependent on importing fossil fuels does not require Pertamina to have highly educated directors and commissioners paid enormously while performing poorly. Elementary school graduates can perform to that standard. (Achmad Nur Hidayat MPP)