Pertamina to hold exclusive rights to sell subsidized fuels in Java, Bali
Tuesday, May 26 2009 - 02:44 AM WIB
Jugi Prayogia, a member of a committee at the downstream oil and gas regulator BPH Migas, said in Jakarta on Monday that the exclusive rights to be given to Pertamina in the distribution of the subsidized fuels in Java and Bali would be stated in the regulation which would be soon issued by BPH Migas.
BPH Migas is currently revising its regulation No. 9, 2005 on Public Service Obligation in order to accommodate the change in the mechanism in the selection of distributors of subsidized fuels from a competitive bidding to a direct appointment beginning next year. The revised regulation will also allow the appointment of Pertamina as the sole distributor of subsidized fuels in Java and Bali.
The government said earlier that it would select distributors of subsidized fuels for next year through a direct appointment system instead of through a competitive bidding as applied in the previous years in a bid to avoid the lengthy tendering process.
Prayogia said that Pertamina would be awarded exclusive rights to distribute and sell subsidized fuels in Java and Bali because the two areas were relatively safe from a possible fuel shortage thanks to the existence of several oil refineries, sufficient fuel storages and extensive distribution networks.
?If the areas are considered safe (from possible fuel shortage), the presence of other companies are no longer needed,? he said, adding that the existence of state-owned company like Pertamina should be also protected.
According to data issued by BPH Migas, the sales of subsidized fuels in Java and Bali account for about 50 percent of the country?s total fuel consumption. In 2010, the government plans to distribute 21.45 million kiloliters of Premium gasoline, 3.80 million kilolitres of kerosene, 11.25 million kiloliters of diesel fuel.
Prayogi said that BPH Migas will divide the subsidized fuel market into four main distribution regions which will comprise of 14 sub-distribution areas.
Other companies will be allowed to accompany Pertamina in the distribution of subsidized fuels in areas which are considered to be still vulnerable to fuel shortages. ?BPH Migas will fix the volume of the subsidized fuels that will be distributed by Pertamina and other companies in such areas,? he said. (*)