Govt to involve private sector in building oil fuel buffer stock

The government is formulating a scheme that will enable private sector to participate in developing the national oil fuel buffer stocks in order to reduce the government?s investment in the projects, Director General of Oil and Gas IGN Wiratmaja said recently.

Wiratmaja said during a hearing with the House of Representatives? Commission VII, which oversees among others energy affairs, said private companies which will be awarded with contracts to manage the buffer stocks, may store the oil fuels using their own facilities or the facilities leased from third parties.

Besides, the government may also use the Petroleum Fund to build the buffer stock, Wiratmaja said.

Wiratmaja earlier announced that the government plans to build oil fuel buffer stocks as much as 30 days of consumption to anticipate potential energy crisis in the future. The project is estimated to need a total investment of US$17 billion. So far, Indonesia does not such stocks. State owned oil and gas firm PT Pertamina (Persero) however has the so-called ?operational reserve? that is enough for 20 days of consumption.

In comparison, Japan has a buffer stock, which is enough for one year consumption, Veitnam 60 days and Malaysia 45 days, according to the statement from the directorate general.

Editing by Johannes Simbolon