Pertamina and private firms can jointly sell subsidized fuel

The government has opened the opportunity for private companies ? both domestic and foreign ? to sell subsidized fuel in cooperation with the state-owned oil and gas firm PT Pertamina. These companies, which have limited storage and distribution facilities, can use Pertamina?s facilities on a rent basis, the Kompas newspaper reported in its Monday edition.

This was one of the outcomes of a meeting between the Downstream Oil and Gas Regulating Body (BPH Migas) and several oil and gas firms, which were interested in distributing subsidized fuel through public service obligation (PSO) mechanism, held recently in Denpasar, Bali.

BPH Migas chief Tubagus Haryono said the meeting?s outcome will become the basis for the PSO auction in 2007. The auction will be organized in July 2006.

In line with the Presidential Decree No. 71/2005 regarding the supply and distribution of certain fuels, Pertamina, as an old player, must open itself to the new players who wants to enter the business. But there is no need for the new companies to have storage and distribution facilities.

?From the point of facilities and reaching capacity, Pertamina is the best. Most probably later, Pertamina will still win the auction. However, the door is opened for private companies to work with Pertamina through mutual business agreements to sell subsidized fuel. The smooth flow of oil distribution is still the responsibility of Pertamina,? Tubagus said. (*)