Govt to open up aviation fuel market next month

The government will open up aviation fuel market for commercial airlines next month as part of the liberalization of the country's fuel retail market, Minister of Transportation Hatta Rajasa said Wednesday.

Speaking during the inauguration of the expansion of the Djuanda Airport in Surabaya, Hatta said that the government had chosen the Djuanda airport as the pilot project in the distribution of aviation fuels by private companies.

He said the government was currently finalizing the tender for the appointment of a consortium, which would provide the aviation fuel distribution at the airport.

In the initial stage of the liberalization process, Pertamina which currently holds the exclusive rights in the distribution of aviation fuels would continue to get a priority from the government.

"But in the future, Pertamina should also join the tender in the distribution of aviation fuels," he was quoted by Kompas as saying.

According to the minister, the pressure to open up the country's aviation fuel market does not only come from local airlines but also from international carriers. At present, many airlines prefer to buy fuel in Singapore because the price in the country's airport is cheaper than those in Indonesia, he said.

Earlier reports said that Pertamina is mulling to join with multinational companies like Shell and Petronas to tap the aviation fuel business in the domestic market

There is a growing demand for establishing a consortium, especially to provide aviation fuel in Djuanda Airport in Surabaya, East Java, director for marketing and commerce of Pertamina Ahmad Faisal said on Oct 31. (*)