Pertamina cuts down profit target to Rp 15.5 trillion

State owned oil and gas company Pertamina has lowered its profit target to Rp 15.5 trillion this year from Rp 22.4 trillion on a sharp decline in the company's profit projection from fuel distribution business.

"The 2006 profit target has been lowered because a revision in the profit projection in the income from the downstream business. The profit from the downstream business will likely reach only about Rp 5.7 trillion, far lower than the initial target of about Rp 10 trillion," Pertamina's finance director Alfred Rohimone said before attending the meeting on the company's annual budget and working program.

In 2005, Pertamina booked profit of about Rp 11.3 trillion, exceeding its own target of about Rp 6.4 trillion. The gross profit from the downstream business reached about Rp 18.49 trillion in the year, about 205.4 percent of the target, while those in upstream sector reached Rp 5.26 trillion, or about 150.3 of the target.

Initially the company targeted to double the profit this year to Rp 22.4 trillion on expected increase in the income from the distribution of the subsidized fuel.

Alfred said that Pertamina initially projected to receive profit margin of between 16 and 19 percent from the sales of the government's subsidized fuel. But the request was turned down. Minister of Energy and Mineral Resources Purnomo Yusgiantoro said that the profit margin should not exceed the 15 percent as stated in the state budget in a bid to reduce the government's subsidized subsidy. (Godang)