New fuel distributors should build their own facilities

Foreign companies interested in entering the country’s fuel retail market will be obliged to build distribution facilities so that their presence would help expand the fuel distribution network in the country, Minister of Energy and Mineral Resources Purnomo Yusgiantoro has said.

The minister told Kompas daily that such a requirement, that would be imposed on fuel distributors, would be spelt out in the regulation on the domestic oil market which was now being prepared by the government.

“Like Pertamina, new players will be also required to provide fuel stock for at least 25 days. They should also build their own distribution facilities such as fuel depots,” he said.

The minister said that new investors would not be allowed to keep their fuel stocks in their depots outside the country although the location is not so far away. “This is important so that their presence will bring a positive impact on the country’s fuel distribution network,” he added.

Under the new oil and gas law, beginning 2005, foreign companies are allowed to enter the fuel retail market which is now still monopolized by Pertamina. The government is still preparing the implementation regulation of the law.

A number of foreign oil companies have expressed their interest to enter the local fuel market but they want the government to allow them to use Pertamina’s facilities in selling the fuel. (*)