Pertamina to acquire 1,200 gasoline stations

State owned oil and gas mining company Pertamina will acquire at least 1,200 public gasoline stations or about a half of the existing petrol stations in the country in anticipation of the opening of the retail sector in the country's oil industry to foreign companies in 2003.

Pertamina's marketing director Harry Poernomo said in Jakarta on Monday that negotiations on the acquisition of the gasoline stations were underway. He added that acquisition would cost the state oil company about Rp 3 billion for every station or about Rp 3.6 trillion for the 1,200 stations.

According to him, the acquisition is needed because at present Pertamina owns only about 40 petrol stations. If the acquisition is not made, they will be taken over by new players such as Shell and Exxon-Mobil, he added.

Pertamina previously owned all the gasoline stations in the country until it privatized the fuel distribution operation in late 1989 as part of its program to cut operational costs. There are about 2,300 gasoline stations in the country at present.

Harry said that entering the retail sector would be much more profitable during the free era because the government would no longer subsidize the fuel sales. "When the retail sector is fully opened, the profit margin will double from between four and five percent at present because there will be no more government's subsidy," he added. (*)