Pertamina asked to buy crude oil from domestic market

State owned oil and gas company Pertamina has been asked to buy crude oil from domestic market to meet the crude oil needs of its refinery plants so that the use of U.S. dollars to finance the crude oil imports could be reduced, Koran Tempo reported on Friday.

State Minister for State Enterprises Sugiharto said Thursday that the government was still studying the possibility of buying crude oil from local oil producers. "Rather than buying from overseas it would be better for Pertamina to buy from domestic market," he said.

Pertamina needs at least US$1.1 billion a month to finance crude oil imports. The purchase of the Amercain currency to import the crude oil has often jeopardized the foreign exchange trading in the country. Early this week, Rupiah dropped to nearly Rp 10,000 against the U.S. dollar from about Rp 9,500 due to a massive purchase of the American currency by Pertamina.

Sugiharto acknowledged that not all of the crude oil produced by local oil companies are suitable for the existing refineries. "But this problem can be solved by arranging a swap mechanism with foreign buyers," he said. (*)