Govt may impose limit on sulphur content in HSD March

Government said on Thursday it may move to impose ban on the sale of high-speed diesel (HSD) which contain more than 3,500 ppm of sulphur at retail gasoline stations this month, but may extend the sale of such fuel to industrial users for another year.

Erie Soedarmo, Downstream Development Director at the Ministry of Energy and Mineral Resources said that starting March 16, 2007, all HSD sold in retail gasoline stations must comply with sulphur limitation of 3,500 ppm maximum. This, said Erie, is inline with automotive sector developments, where new vehicles that enter the market are best to consume cleaner fuel.

Erie went on to say that his office would recommend that the government to extend the sale of HSD with more than 3,500 ppm to industrial users due to high costs of cleaner HSD. ?It would costs industrial users additional US$4-5 per barrel to use less sulphur HSD. Therefore, they will need more time to adjust,? he said.

Currently, HSD sold in Indonesian market has 5,000 ppm sulphur content.

Erie said he had received responds from HSD suppliers that they would have no problems to comply with the sulphur limitation regulation. Currently, the biggest HSD retailer is state oil and gas company Pertamina. Other suppliers such as Shell and Petronas are also selling HSD in their gas stations.

Separately, Pertamina Processing Director Suroso Atmomartoyo told Petromindo.Com that Pertamina is ready to comply with the sulphur limitation. He, however, warned of the costs consequence. "Production costs will go up and since government still subsidizes most of the HSD sold in retail gas sations, the government must bear additional costs," he said, without giving figure.

Director General of Oil and Gas Decree issued in March 2006 instructed that all HSD sold in Indonesia must contain maximum sulphur of 3,500 ppm starting March 16, 2007.(godang)