Private fuel retailers should operate at least in two distribution areas

Private fuel retailers should operate fuel stations at least in two distribution areas to be able to join the tender to sell subsidized fuels in the country which will be opened between July and September this year, Bisnis Indonesia reported on Saturday.

"That is the minimal requirement that has to be fulfilled, if private oil retailers want to join the tender," Tubagus Haryono, the chief of BPH Migas, the government's regulatory body for downstream oil and gas industries.

He said that such a requirement is needed so that fuel retailers would not only operate in lucrative distribution areas. "If they want to take part in the distribution of subsidized fuels, they should not only operate in lucrative markets such as Java and Bali," he said.

According to him, the government has divided the domestic fuel market into four distribution areas. The distribution area I covers Sumatra, area II for Java and Bali, area III for Kalimantan, Sulawesi and Papua, and area IV for West Nusa Tenggara and East Nusa Tenggara.

Tubagus said that the tender would be opened only for the sale of subsidized Premium gasoline and diesel oil. Meanwhile, the distribution for subsidized kerosene will remain handled by Pertamina.

The government allowed last year private companies to enter the country's fuel market as part of the liberalization of the country's fuel market which was previously monopolized by Pertamina.

But the exclusive rights given to Pertamina to distribute subsidized fuels was extended until the end of this year because private oil retailers did not have enough distribution networks to take part in the sales of the subsidized fuels.(*)