Pertamina to sell aviation fuel in cooperation with Shell, Petronas

State-owned oil and gas company is mulling to join with multinational companies like Shell and Petronas to tap the aviation fuel business in the domestic market, the Investor Daily Indonesia newspaper reported in its Monday edition.

The cooperation plan will be realized in 2006.

“We are currently negotiating about the type of cooperation that can benefit all the three. But so far Shell is very serious and it is interested in it,” Pertamina’s public relations chief Abadi Poernomo told the Investor Daily on Sunday.

The negotiations, according to Abadi, are still going on with an approach of business-to-business. They are focusing on issues like the format of the cooperation and who will supply the aviation fuel.

Currently, Pertamina has all the facilities but its aviation fuel production capacity is limited. Aviation fuel is not subsidized and follow the market mechanism as far as the prices are concerned.

By end of 2004, the Indonesian aviation fuel market increased to 2.4 million kiloliters per year from 1.9 million kiloliters in 2003.(*)