PLN, Pertamina to revise fuel supply contract

State-owned electricity company PT Perusahaan Listrik Negara (PLN) and state-owned oil and gas company PT Pertamina plan to revise the two companies' fuel supply contracts, especially related to the formula in determining the price and in the distribution of the fuel, Koran Tempo reported Monday.

 

PLN's director for power plants and premier energy, Ali Herman Ibrahim said in Jakarta last week that the prices of the fuel to be supplied by Pertamina would be fixed 9.4 percent above the average price at the Mid Oils Platts Singapore (MOPS).

 

He said that at present the price was fixed 14 percent above the average price at MOPS. However, the price would be still based on a free-on-board (FOB) system in which the price would not include the delivery costs.

 

Pertamina's spokesman Toharso said that Pertamina and PLN had reached an initial agreement on the pricing formula change. "We will soon sign the contracts," he said, adding that once the contracts had been signed, Pertamina would no longer need to take part in PLN's fuel procurement tender.

 

Earlier, PLN signed a memorandum of understanding (MoU) with Pertamina. Under the MoU signed by PLN's president director Eddie Widiono and Pertamina's president director Ari Soemarno, Pertamina would supply about 9 million kiloliters of fuel to PLN a year at total contract of about Rp 40 trillion.

 

At the present PLN launches a tender this month to buy about one million kiloliters of fuel from private companies outside Pertamina for a number of its power plants including the Muara Tawar power plant in Bekasi, the Tambak Lorok power plant in Semarang and the Grati power plant in East Java.(*)