Pertamina seeking profit margin of 15% from fuel sales

Pertamina is seeking a profit margin of 15 percent from the distribution of the government's subsidized fuels in 2006 , or in line with the limit set under the 2006 state budget.

Speaking to reporters on Friday, the company's commerce and marketing director Ari Soemarno said that the profit margin from the distribution of the subsidized fuel should not be lower than 15 percent so that Pertamina would be able to meet its profit target.

"It should be no problem because if Pertamina receive big profit, it will be still for the benefit of the state," he added.

According to the new oil and gas law, the exclusive rights awarded to Pertamina to distribute fuel in the country ended in December. But the company has been allowed to continue the distribution of subsidized fuel one more year.

Pertamina will receive profit margin from the distribution of the subsidized fuels. The margin is calculated based on fuel price index under Mid Oil Platt Singapore (MOPS). Previously, the company was given a fee of Rp 10 per litter from the sales of the subsidized fuels.

Pertamina has proposed a profit margin of between 16 and 19 percent but Minister of Energy and Mineral Resources Purnomo Yusgiantoro said the proposed profit margin were too high.

According to him, the profit margin should not exceed the 15 percent ceiling stated in the state budget in a bid to reduce the government's subsidy. (Godang)