Pertamina no longer carry out Public Service Obligation (PSO)

State owned oil and gas company Pertamina will be no longer required to carry out Public Service Obligation (PSO) beginning the end of this year to ensure that the company will be able to operate as a pure profit-oriented business entity as stated in the new oil and gas law, Kompas reported on Wednesday.

Eri Purnomohadi, a senior official of BPH Migas, the government's regulatory agency in charge of downstream oil and gas industries, said in Jakarta on Tuesday that as the consequence of the removal of the PSO task, Pertamina's obligation to soley ensure fuel supply in the domestic market would end in November this year.

"But Pertamina will continue to handle the fuel supply until the end of 2005 under the new contract awarded by the government to the company," he was quoted as saying.

He said that under the new system, other private companies would also be allowed to supply fuel products at home.

"We hope, beginning 2008, some of the fuel products could be provided by other companies," he said.

Pertmina, according to him, should be more profitable with the removal of its PSO requirement, because with the new system, the government will not only cover the production cost for the fuel procurement but also should pay a commission and a profit margin to the state owned oil and gas company.

"At present, It seems that Pertamina only receives a fee from the government," he said. (*)