Pertamina ready to cut aviation fuel price

State oil and gas firm Pertamina said it is ready to cut the price of aviation fuel at airports targeted for the liberalized aviation fuel business, including the Soekarno-Hatta Airport and Djuanda Airport in Surabaya, Investor daily reported Monday.

The company?s president director Ari H Soemarno admitted that the company would not be able to compete with other players (in aviation fuel business), especially in large-scale airports like the Soekarno-Hatta Airport and the Djuanda Surabaya Airport if the price was retained at the current level.

?The aviation fuel price is higher than that of economy-based aviation fuel,? he said.

Ari said that to be able to compete with other players, Pertamina should lower the price and adjust it to the economy-based fuel price in every airport. But how low the price will be cut will also depend on the distance of where the supply of aviation fuel comes from because different location needs different transportation cost, he said.

The prevailing aviation fuel price set by Pertamina is between Rp 5,600 and Rp 6,237 per liter. For an example, the aviation fuel is sold for Rp 5,665 per liter at the Soekarno-Hatta in November of this year and the price is set at Rp 6,237 per liter in Jayapura in the same month, he said.

Meanwhile, director general for the ministry of energy and mineral resources Luluk Sumiarso said that the liberalization of aviation fuel sale in every airport will be done through tendering process. ?Up to now, the decision on whether the aviation fuel business will be liberalized or not has yet to be made. This is the authority of minister of energy and mineral resources,? he said.

Luluk added that it is unnecessary for private companies like Royal Dutch/Shell and Malaysia?s Petronas to ask for a license if they intend to run the aviation fuel business because the have already pocketed the license for downstream oil and gas business. (*)