Govt offers two options for Pertamina's profit margin

The government has offered two options in determining Pertamina's profit margin from the distribution of the subsidized fuel in the country, according to Minister of Energy and Financial Resources Purnomo Yusgiantoro said as reported by Bisnis Indonesia on Thursday.

The minister said that the profit margin to be given to Pertamina could be in the form of a percentage of the total cost needed for the distribution of the fuel or in the form of absolute value.

"I have asked BPH Migas, the regulatory body for oil and gas downstream industry, the advantages and disadvantages of the two options," he said.

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. (*)