Indonesia not to change crude pricing formula: Purnomo

Minister of Energy and Mineral Resources Purnomo Yusgiantoro said on Tuesday Indonesia has no plan to change pricing formula of its crude used for long-term crude contract.

?The reason for this is that the formula is still acceptable to the market. Moreover, Pertamina has not asked for change with the pricing formula,? Purnomo told Petromindo.com and Reuters.

Pertamina, Indonesia?s state oil and gas firm, said in May it intended to include price assessments by Petroleum Argus Ltd., a U.K. specialist oil publication, in its pricing formula starting as early as July.

Japanese buyers and other importers objected to the plan arguing that the inclusion of Argus assessments would result in higher prices for the Indonesian Crude Price (ICP). They feared that the assessments tend to be higher than similar assessments by Platts and Rim intelligence that currently dominate the term pricing formula.

Meanwhile, Pertamina said recently it had refrained from changing its pricing formula.

The current ICP, as agreed between Pertamina and its term buyers in 1999, is made up 40 percent of Platts assessments, 40 percent of assessments by Rim Intelligence and 20 percent by the Asian Petroleum Price Index (APPI). APPI is a widely used marker for Southeast Asian crude prices that is compiled by an accountancy firm. (Godang)