Pertamina proposes new price formula for fuel sales to PLN

State-owned oil and gas company Pertamina will propose a new pricing formula to the government for the sales of its fuel to state-owned electricity company PT Perusahaan Lisrik Negara (PLN) so as to enable it to compete with private fuel distributors.

Speaking to the press on Thursday, Pertamina's Pesident Director Ari H Soemarno said with the new pricing formula, Pertamina would have much room to compete with private distributors.

"The price in one region will be different from those in other regions,? he said, adding that at present the company used a single price formula for all PLN branches in the country.

At present, Pertamina sells its fuel based on Mean Oil of Singapore (MOPS) plus margin and distribution costs of 9.5 percent to all PLN branches.

By using different pricing references, the price of fuel sold by Pertamina in Java will be around MOPS plus 6 percent while those in Papua can reach MOPS plus 30 percent, he said.

PLN has recently named Shell and PT Aneka Kimia Raya to provide about 1 million barrels of its fuel needs after Pertamina refused to lower its fuel price. (*)