Govt drafting regulation on oil fuel operation and buffer stocks

The government is drafting a regulation on the provision of oil fuel operational and buffer stocks, which is expected to be completed this year, the Directorate General of Oil and Gas said in a statement on Tuesday.

The government wants Indonesia has operational and buffer stocks, each of which is enough for 30 days of national consumption.

Director General of Oil and Gas IGN Wiratmaja said the provision of both stocks are necessary in anticipation of possible energy crisis in the future. At present, Indonesia has only one type of stock, that is commercial stock which is managed by state owned oil and gas firm PT Pertamina (Persero), amounting to 21-22 days of national consumption.

In order to increase the amount of the commercial stock to 30 days of consumption, the state firm needs to increase the stock by 15 million barrels, while the buffer stock needs 45 million barrels of oil fuels.

He said the government has found a total capacity of 1 million barrels in storages owned by Production Sharing Contract (PSC) holders and other state owned firms that can be used to store oil fuel commercial and buffer stocks. To fill the gap, several companies have proposed to build storages to be leased by the government. ?There are many companies interested to build the storages and even provide the fuels. We (the government) shall lease (the storages and make payment) depending on the amount of fuel we take. We are drafting a regulation to govern the matter,? he said.

When asked about Pertamina?s plan to lease storages outside of the country, Wiratmaja said the government supports the plan as it realizes it will take time to build storages. Still, the government wants the storages to be built domestically as it will bring investment into the country, create jobs domestically and increase the capacity of local workers in mastering technology.

Editing by Johannes Simbolon