Govt cancels plan to limit diesel oil imports

The government has cancelled its plan to restrict local companies from importing diesel oil, citing that the local production is still insufficient to meet the demand, Kontan reported on Monday.

Evita H. Legowo, the director general of oil and gas at the Ministry of Energy and Mineral Resources, said in Jakarta on Friday that the plan to restrict diesel oil imports was cancelled because the government doubted if diesel supply from local refineries would be enough to meet the demand.

Evita announced the cancellation only a day after she unveiled the import restriction plan. On Thursday, she said that the government would restrict local companies from importing diesel oil and would instead ask them to buy the fuel from Pertamina to help reduce the state oil and gas company?s excess stocks.

Meanwhile, Pertamina has sold the remainder of its excess diesel stock and will begin importing the fuel again this month, Hanung Budya, the deputy director for marketing at Pertamina, said on Friday as quoted by Jakarta Globe.

In April, the company had a diesel stock of 161,000 kiloliters, which is enough or 35 days of consumption, up from the standard 25 days.

?We will maintain a diesel stock of 23 days,? he said.

Pertamina usually imports 3 million barrels of diesel from the Middle East every month but it canceled diesel shipments from Kuwait for February and March.

Hanung said the imports would begin again as long as prices were reasonable. Other fuel importers might benefit if Pertamina purchased in bulk and sold the fuel on to them, Hanung added. (*)