Ministry to require fuel distributors to have domestic reserves
Thursday, April 6 2017 - 12:36 AM WIB
The Ministry of Energy and Mineral Resources will issue a new policy requiring companies engaged in fuel oil distribution in the country to have minimum fuel reserves of up to 30-day of supply.
Director General of Oil and Gas at the ministry IGN Wiratmaja Puja said on Wednesday that under the planned new policy, the companies will be required to set up infrastructure facilities particularly fuel storage tanks at home to be able to meet the fuel reserves obligation.
He said that as it would take about two years to complete construction of fuel storage tanks at home, the target for companies engaged in the distribution of fuel oil products to have domestic reserves enough for 30 days of supply will be realized gradually.
He acknowledged that there is no regulation to date requiring the companies to set up domestic fuel stock. He added that some of the companies do not have domestic fuel reserves at all as they stored the fuel products overseas.
He said that with the upcoming new ministerial regulation, the companies given permit to be engaged in the distribution of fuel oil products such as Pertamina, Shell, and AKR will be required to set up domestic fuel stock as part of efforts to strengthen the national fuel reserves, which will be crucial when the county faces fuel shortage.
He said that so far, the government has only required state-owned oil and gas firm Pertamina to have domestic fuel reserves, enough to supply national demand for 18-23 days. He added that some companies have already set up reserve enough for 30 days of supply or more.
?The new regulation on operational fuel reserves is being drafted. Any companies with permit to sell or distribute fuel products must store their fuel stock at home, gradually to reach 30-day of supply. They have been given permit to distribute fuel products here, and they must also store the fuel stock at home,? he explained.
Wiratmaja said that companies failing to complete the required storage tanks within two years will be given penalty including possibility of revoking their trading license or shutting down their gasoline stations.
Editing by Reiner Simanjuntak