Pertamina's lubricant monopoly must be ended: association

The Association of Lubricant Importers and Distributors (Perdipi) has called on the government to revoke Presidential Decree No. 18/1988 that grants monopoly rights to Pertamina to produce lubricating oils as this monopoly is against Law No. 5/1999 on business competition.

Perdipi chairman Paul Toar said in Jakarta over the weekend that the monopoly had also caused local industries had no many choices in using the lubricants, and this affects efficiency and productivity of machinery they use.

Besides, the monopoly had barred the development of local lubricant industries.

Paul said that many sophisticated-machinery used by local companies often require high-quality lubricants with certain formula, but because there is no lubricants meeting the requirement, they would be forced to use lubricants available in the market.

"Consequently, their productivity drops, the life-span of spare parts drops, efficiency drops, and eventually, the competitiveness of Indonesian products also drops," he said.

Quoting a survey by Lubrizoil, Paul said the quality of lubricants have been increasing from time to time, from CF-4 technology, to CG-4 (1994 technology) and now CH-4 (1997 technology), and this has increased the life-span of truck engines in Japan, European countries and United States from 1 million kilometers to 1.6 million kilometers.

"Meanwhile, in Indonesia, the life-span of truck engines only lasts between 200,000 kilometers and 400,000 kilometers," he said.

He noted that Indonesia was way behind in lubricating technology. About 95 percent of lubricants used in Indonesia uses CD technology (1955 technology).

He said that Indonesia is the only country in the region that still regulates the production and distribution of lubricating oils. Malaysia and India, for instance, had abolished monopoly in lubricating oil since six years ago, and this encourages lubricating industries to boom. (*)