Pertamina wants fair deal with govt over fuel business

State oil and gas company Pertamina has proposed to the government to set a fairer deal on the processing and distribution of fuels in the country whenever Pertamina's monopoly is trimmed and the company is forced to compete freely in the market with private oil companies, according to one of its directors.

Speaking to reporters after receiving a report on Pertamina's corporate restructuring, Pertamina's director for downstream industries, Ariffi Nawawi, said that Pertamina did not want to become merely an operator of the government in the processing and distribution of fuels.

"As a business entity, Pertamina wants to get profits," Ariffi said.

He noted that Pertamina wanted a higher fee for the provision and distribution of fuels. Currently Pertamina gets only 20 U.S. cents per barrel of crude oil, of which 65 percent must be returned to the government.

Ariffi asked the government to cut the portion Pertamina had to return to the government from 60 percent of the fees to only 35 percent, the same level the government charges to private oil companies.

He also said the fee the government should pay to Pertamina should be set at a market price rate. For instance, Pertamina recently processed crude oil into fuels at a refinery in Singapore, belonging to Shell, in which Shell charged Pertamina 50 U.S. cents per barrel.

"Pertamina wants to get a profit from processing fuels. If we get a profit of 10 percent, that's normal, isn't it?" Ariffi said.

Ariffi also said that Pertamina wanted the government to transfer the ownership of refineries across the country to Pertamina to strengthen the company's position in the future when competition in the industry is opened.

The refineries currently belong to the government, and are operated by Pertamina. (*)