Private firms will sell 30 percent of subsidized fuel

The government is planning to handover 30 percent of the total subsidized fuel to private companies – both foreign and domestic -- to sell and distribute it to the public, the Investor Daily Indonesia newspaper reported in its Tuesday edition.

The new policy will be in line with the liberalization of oil and gas downstream operations and it will be effective starting from November 2005.

“We are mulling to whether we can auction 100 percent of the subsidized fuel to private companies or just 30 percent,” oil and gas sector’ downstream operations regulator BPH Migas chief Tubagus Haryono told the Investor Daily on Monday in Jakarta.

Tubagus mentioned the possible scenario in which Pertamina will handle the distribution of 70 percent subsidized fuel in the first phase. The remaining 30 percent will be auctioned through direct appointment.

Any company -- including Pertamina – that has license from the government can participate in the auction

“BPH Migas will select the winner that can offer the lowest price and cheapest so that the government will not bear the high cost burden,” Tubagus said.(*)