Govt has yet to decide on profit margin for Pertamina fuel sales

It has been almost one month since the reappointment of state owned oil company Pertamina to distribute subsidized fuel, but the profit margin to be given to the company to handle the distribution job has not been fixed.

Minister of Energy and Mineral Resources Purnomo Yusgiantoro said Thursday that the profit margin of between 16 percent and 19 percent proposed by Pertamina was still too high.

"At present BPH Migas (the regulatory body in the down stream sector) is recalculating the right level for the profit margin to be given to Pertamina," he was quoted as saying by Kompas.

According to the new oil and gas law, the exclusive rights awarded to Pertamina to distribute fuel in the country ended in December. But the company has been allowed to continue the distribution of subsidized fuel one more year.

At present the government decides the profit margin for the distribution of the subsidized fuel. In the previous years, Pertamina received fees as the reward for the fuel distribution.

According to the law, the profit margin should not exceed 15 percent. (*)