Jakarta. President Prabowo Subianto on Wednesday pledged firm action against the alleged practice of mixing subsidized gasoline with a higher-priced fuel product at a subsidiary of state-owned oil company Pertamina. 

When asked by reporters about the allegations -- surfacing from the ongoing graft investigation by the Attorney General’s Office -- Prabowo said: “Everything is being taken care of, okay? We will clean up and uphold [regulations].” He made these comments shortly after launching Indonesia’s first bullion banks in Jakarta.

Two days earlier, the AGO, which reports directly to the president, announced the arrests of seven suspects linked to alleged corruption in Pertamina’s subsidiaries. The allegations center on fraudulent crude oil imports and gasoline blending that investigators claim caused $11.9 billion in state losses.

Among the suspects are two CEOs from Pertamina Patra Niaga and Pertamina International Shipping, as well as two executives from Kilang Pertamina International, which refines crude oil into fuel products. The remaining suspects are executives and commissioners of private companies that won contracts to import and transport crude oil for Pertamina.

Prosecutors allege that Pertamina executives conspired to mix cheaper, subsidized gasoline with the company’s popular, higher-priced Pertamax fuel. They also accuse the suspects of violating government restrictions on crude oil imports. 

In response, Pertamina Patra Niaga -- the sales arm of Pertamina -- denied on Wednesday that it blends Pertalite with Pertamax.

Acting CEO Mars Ega Legowo clarified that the company adds an additive to gasoline to raise its octane number, a practice he said is common in the industry. 

He maintained that Pertamax itself is not a blended product, pointing out that Pertamina has no dedicated gasoline blending facility and instead only uses an additive and coloring substances. Ega did not specify which additive is used in Pertamax production.