Govt offers oil refinery projects to private investors

Government has once again opened opportunity for private investors to build oil refineries in order to reduce the oil imports and meet the anticipated increase in domestic fuel demand, Koran Tempo newspaper reported in its Wednesday edition.

Director of oil and gas trade and stock management Erie Soedarmo said the building of more refineries is very important in a bid to secure oil supply in the country. Because the capacity at the existing refineries is already saturated.

“If we have not added more refineries, we have to depend on oil imports from Middle East. This will lead to higher fuel prices (at home).” Erie said.

Government, according to Erie, must give fiscal incentives to investors. Because without tax-free facility, the investment in refinery will not be profitable.

“Refinery business must be given incentive, because the profit is very low,” Erie said.

Since 1994, government has awarded permits to 20 investors to build refineries. But not a single investor has started refinery project and even in some cases the time limit of the permit has already lapsed. (*)