Inco, Newmont and Paiton asks to buy Pertamina's fuel at low price

Nickel mining producer PT Inco, gold mining companies PT Newmont Minahasa Raya and Newmont Nusa Tenggara and power producer PT Paiton Energy have asked to buy fuel from state oil and gas company Pertamina at domestic price, but the state company turned down the request, Pertamina said on Tuesday.

Pertamina's director of fuel provision and marketing Harry Poernomo said the four companies had agreed to buy fuel from Pertamina at international price in May last year but they asked to review the price after Minister of Mines and Energy Susilo Bambang Yudhoyono recently asked Pertamina to suspend its pricing policy.

"The negotiation is still in progress. Thus far, we don't want to review the pricing policy with the four companies. They have made an agreement to buy our fuel at international price and we don't want to change an agreement that has been implemented," Harry said.

Harry said Pertamina introduced a policy of selling fuel at international price to mining and energy companies in May last year.

The four companies accepted the policy but state general mining company PT Aneka Tambang then turned down the policy, insisting on buying fuel at subsidized price set by the government, Harry said.

Pertamina planned to expand the policy several months ago to all export-oriented companies, but Bambang recently ordered the state company to suspend the policy following protests by several associations, including fishing group.

Harry said Pertamina would suspend the policy, except for the four companies that had agreed to buy Pertamina's fuel at international price.

Inco, a subsidiary of Canadian firm Inco, operates a huge nickel mine in South Sulawesi. Newmont Minahasa Raya and Newmont Nusa Tenggara, both subsidiaries of American mining giant Newmont Corp, operate gold mines in North Sulawesi and West Nusa Tenggara respectively. Paiton Energy, a subsidiary of American firm General Electric, operates a giant power plant in Probolinggo, East Java. (*)