President inaugurates oil refinery in Indramayu

President Susilo Bambang Yudhoyono officially inaugurated a new oil refinery in Balongan, Indramayu, West Java province on Sunday, the Antara new agency reported.

The new refinery plant being built under Pertamina's Langit Biru or blue sky project as part of the expansion of the company's Balongan refinery, would be able to produce environmentally friendly High Octane Mogas Component (HOMC) fuel with capacity of 52,000 barrels per day and liquefied petroleum gas of about 200 tons per day.

Susilo said the refinery could also help save the state budget from rocketing oil prices on the international market.

The President said if the country had to rely solely on imported fuel, the cost of the subsidy would continued to soar.

"The higher the oil price (internationally), the higher the cost of the subsidy and the heavier the country's burden," he said.

He said that with current oil prices, the cost of the subsidy had reached Rp 140 (US$=Rp.10,400) trillion, more than a quarter of this year's total state budget.

After the inauguration, Minister of Energy and Mineral Resources Purnomo Yusgiantoro said the Langit Biru refinery could save the budget about US$580 million per year.

State oil and gas company Pertamina has nine refineries, with a total capacity of about one million barrels a day.(*)