Pertamina?s non subsidized fuels sales drop by 6 percent

State oil and gas company PT Pertamina?s sales of non subsidized fuels declined by 6.1 percent last year in part due to liberalization of the downstream sector of the industry and the reduction of fossil fuel consumption by state power firm PT PLN.

Finance director Ferederick ST Siahaan said Tuesday the company?s sales of non subsidized fuels dropped from 19.86 million kiloliters in 2007 to 18.65 million kiloliters in 2008.

?This drop in sales volume was caused by two factors. First is the competition as private retailers also sell non subsidized fuels. The second factor was the policy of PLN to reduce use of fossil fuels for power plants,? Ferederick said during a hearing with the House of Representatives' Commission VII overseeing the energy and mining sector.

To date, retail fuel business players, which sell non subsidized fuels in Indonesia, are Petronas and Shell.

Pertamina?s non subsidized sales volume is always far lower than its sales of the subsidized fuels. Frederick said the company?s sales volume for subsidized fuels in 2008 reached 38.9 million kiloliters, far higher than the 18.7 million kiloliters of non-subsidized fuels.

However, the sales of non subsidized fuels contributed a higher proportion of the company?s downstream profit. Data from Pertamina shows that, in 2006 and 2007, non subsidized fuels contributed more than half of the company?s profits from selling fuels.

The government subsidizes four types of fuels: Premium gasoline, diesel, kerosene, and the 3 kilogram-canister LPG. Pertamina is the sole distributor of the subsidized fuels. (*)