BPH Migas to conduct due diligence on subsidized fuel supplier candidates

Downstream regulatory body BPH Migas said on Tuesday it would start due diligence on prospective candidates for 2008 subsidized fuel distribution.

Committee Member Ibrahim Hasyim told Petromindo.Com on Tuesday that BPH Migas has sent letters to companies which had possessed fuel distribution licenses such as Pertamina, Royal Dutch/Shell, Petronas, Sigma Rancang Bangun Perkasa and AKR Corporindo about their readiness to be verified.

In the letters, BPH Migas specified requirements to be eligible to participate in the tender, including having distribution network in at least two cities, having fuel storage facilities and extensive distribution network.

Once the companies acknowledged to have such facilities, BPH Migas would conduct due diligence on the companies, he said.

Hasyim said that BPH Migas expected to have spotted eligible candidates by November this year an. “If due diligence finds more than one eligible companies, BPH Migas might hold tender to determine distribution fee. However, if in the end, only Pertamina is considered eligible, then BPH Migas might directly appoint Pertamina to carry out 2008 subsidized fuel distribution,” he said.

Under the current regulation, government appoints subsidized fuel distributor every year. State oil and gas company Pertamina has been directly appointed sole distributor since its legal monopoly ended by the new Oil and Gas Law due to its extensive network and facilities.(godang)