Pertamina?s request to export diesel turned down

The government has rejected state-owned oil and gas company Pertamina?s request to export part of its diesel oil stock, saying why exporting while the firm still imports.

Evita Legowo, the Director General of Oil and Gas at the Energy and Mineral Resources Ministry, said in Jakarta on Thursday that export of diesel would only be reasonable if Indonesia does no longer import the fuel.

?Until now, we still import to meet the larger part of diesel demand in the domestic market. Why should Pertamina export its diesel stock,? she was quoted as saying.

Pertamina has asked for the government?s permission to export the fuel in order to reduce its inventory of non-subsidized diesel which has much exceeded the normal level since last year due to the fall in demand.

In the first stage, the company plans to export between 300,000 and 400,000 barrels.

The company?s marketing director Achmad Faisal said that the demand for non-subsidized diesel from industries has dropped to between 58,000 and 59,000 kiloliters per day from the normal level of about 700,000 kiloliters per day since late last year.

In order to reduce the stock, import contracts for the next six months have been cancelled. But the diesel in the inventory continued to increase because there was also an increase in the diesel production in the company?s refineries, he said.(bernard)