Tubagus Haryono, head of BPH Migas, the downstream oil and gas regulator, which oversees the distribution and sale of fuel, estimated that of Indonesia's total 4,800 fuel pumps, a fourth were being used for illegal activity.
said the most common scam was for perpetrators to buy subsidized fuel - like Premium or diesel - at the retail price of Rp 4,500 per liter and then smuggle it into industrial zones where they sold it for Rp 6,500 a liter.
BHP Migas and the police in May signed a memorandum of understanding to strengthen supervision over subsidized fuel distribution, but illegal practices have proved difficult to stop.
As an example, Tubagus
said that in Karawang, West Java, a vehicle was caught smuggling 33 drums of diesel, each with a capacity of 30 liters.
However, the regulator could not do much to have the perpetrators prosecuted.
said that of 166 cases filed with the courts as of Aug. 31, only nine had gone to trial.
As many as 130 cases still needed further investigation, he
said that smuggling cases similar to the one in Karawang were occurring all across the archipelago.
also said that smuggling was among the reasons that the quota for subsidized fuel use continued to exceed the state target year after year.
Without stronger legal enforcement, Tubagus
explained, subsidized fuel consumption might soar to 41.8 million kiloliters a year, exceeding the 40.49 million kiloliters target, with the state having to cough up the extra funds.