Govt sets fuel distribution fee for Pertamina

The government has set a premium of 14.4 percent above international prices to cover profit margin and distribution costs for PT Pertamina to sell subsidized fuel this year, Bloomberg reported on Wednesday.

State-owned Pertamina previously received 20 U.S. cents a barrel for processing the nation's crude oil into fuels and 20 cents to distribute the oil it imported and processed, Iin Arifin Takhyan, the energy ministry's director of oil and gas, said in Jakarta Tuesday.

"The government has agreed on the premium of 14.4 percent on an average of Singapore prices assessed by oil- news service Platts," Takhyan, also the vice president of Pertamina, said. The official letter has not been signed yet, he said.

The government has offered two options in determining Pertamina's profit margin from the distribution of the subsidized fuel in the country. 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.(*)