PLN set to tender fuel procurement for 2008

State-owned electricity company Perusahaan Listrik Negara (PLN) has decided to open a tender for the procurement of the company's fuel needs for next year.

PLN's president director Eddie Widiono said in Jakarta Thursday that the firm decided to open the tender because state oil and gas firm PT Pertamina insisted that it would only sell fuel to the firm on a 9.5 percent fee. The fee, called "alpha", comprises distribution cost and margin.

PLN considered the alpha demanded by Pertamina is too high.

According to Eddie, PLN needs 5.69 million kiloliters of high speed diesel (HSD),  2.7 million kiloliters of marine fuel oil (MFO), 23.9 million tons of coal and 283.9 trillion British thermal unit next year. The amount of HSD and MFO that be offered in the tender will reach about 1 million kiloliters.

Earlier, the government and House of Representatives (DPR) agreed to give Pertamina a five percent alpha in distributing fuel to PLN, despite a five-year contract signed by both firms allowing Pertamina to get a 9.5 percent alpha.

Meanwhile, Minister of Energy and Mineral Resources Purnomo Yusgiantoro said on Friday that the government would not bar PLN from importing fuel for its operation. (Bernard)