Investors awaiting total removal of fuel subsidies

Many investors would enter Indonesia?s fuel sector if the government no longer subsidizes domestic fuel prices, oil and gas director general Iin Arifin Takhyan said Monday.

?Many investors, including foreigners, have expressed interest to do business in the downstream sector. But, subsidized fuel prices remain a constraint for them,? Iin Arifin told reporters.

The government so far had issued no license for business in the downstream oil and gas sector, the director general said.

The current oil and gas law, put into force in 2001, allows investors to enter the country?s downstream oil and gas sector which had been monopolized by state oil and gas firm Pertamina for decades.

Meanwhile, the government and the House of Representatives had agreed to gradually remove all fuel subsidies until 2004 in a bid to cope with the growing state budget deficit.

However, Minister of Energy and Mineral Resources Purnomo Yusgiantoro said the deadline for the total removal of fuel subsidies should be extended to as early as 2005. (godang)