Newmont, Inco, Paiton agree to buy fuel at international price

Mining companies PT Newmont Minahasa Raya, PT Newmont Nusa Tenggara, PT Inco in South Sulawesi and independent power producer PT Paiton Energy have agreed to continue buying fuel from state oil and gas company Pertamina at international price, a Pertamina senior official said on Wednesday.

"There are no longer any renegotiations on the fuel price. They have realized they don't need fuel subsidy," Pertamina's fuel provision and marketing director Harry Purnomo told Petromindo. Com.

Newmont Minahasa Raya and Newmont Nusa Tenggara operate gold mines in North Sulawesi and West Nusa Tenggara respectively. Inco operates a nickel mine in South Sulawesi, while Paiton operates a giant power plant in East Java.

Last year, the four companies voluntarily signed contracts to buy fuel from Pertamina at international price rather than local price to alleviate the government's subsidy burden. The prices of fuel sold by Pertamina are much lower than those in the international market due to the government subsidy.

However, the companies recently asked to renegotiate the price, citing that other companies bought fuel from Pertamina at domestic price and Minister of Mines and Energy Susilo Bambang Yudhoyono had ordered Pertamina to sell fuel to all companies in the country at subsidized price.

Pertamina however dismissed their renegotiation efforts, saying the sale of fuel at international price to the four companies were based on contracts. (*)