Pertamina in talks with Shell, Petronas on aviation fuel business

Government expected to start dismantling Pertamina's monopoly in aviation fuel distribution business by the end of the year and targeting new players to start entering the business by year-end through tendering process.

Minister of Transportations Hatta Radjasa said on Tuesday that under the new distribution system, new players would have to partner with Pertamina to run the business.

?We hope that one new player (in aviation fuel) has started operation in an airport,? he was quoted by Republika as saying in Jakarta Tuesday.

The number of partners with whom Pertamina will work will depend on the capacity of the concerned airport. ?An airport with a big capacity like the Soekarno-Hatta Airport, for instance, may need two or three companies (partners). But other airports with smaller capacity like the one in Makassar, in Medan or in Surabaya, may only need two companies at the maximum,? he said.

Meanwhile, director for marketing and commerce of Pertamina Ahmad Faisal said it had currently hold talks with Royal Dutch/Shell and Petronas to run aviation fuel business in Soekarno Hatta airport.

There is a growing demand for establishing a consortium, especially to provide aviation turbine fuel in Djuanda Airport in Surabaya, East Java, he said.

Initially, the plan for establishing a consortium would be materialized in early 2006 but was delayed because the two producers had yet to meet the requirements, including an obligation to bring customers of aviation turbine from their respective countries to fill fuels in Indonesia, he said. (*)