Government to launch an open tender for PSO rights

The government will launch an open tender for the distribution of subsidized fuels in the country to both local and foreign fuel retailers as part of the liberalization in the country's fuel retail market,Bisnis Indonesia reported on Saturday.

Minister of Energy and Mineral Resources Purnomo Yusgiantoro said in Jakarta on Friday that all companies had the rights to take part in the tender as long as they could meet the requirements.

According to him, companies allowed to take part in the tender, only if they have an operating permit,with adequate fuel storage and distribution facilities within certain area."They should also have the capability to handle the distribution in area which has not yet been accessed by existing fuel distribution networks," he added.

At present, the distribution of the subsidized fuel is

handled by Pertamina under exclusive rights called Public Service Obligation (PSO). The exclusive rights awarded to Pertamina would however be ended in January, next year as part of the liberalization in the domestic fuel retail market.

As part of the fuel retail market reform, Pertamina will have to compete with other companies in distributing the subsidized fuel. But analysts estimate that Pertamina will continue to dominate the fuel distribution because it is the only company in the country which has adequate fuel storage and distribution facilities. (*)