Shell fails to distribute 2010 subsidized fuel

Downstream oil, gas regulator BPH Migas said on Monday that PT Shell Indonesia, an unit of Dutch-English oil giant Royal Dutch/Shell, has failed as one of the winner of 2010 subsidized fuel distribution.

Tubagus Haryono, the head of BPH Migas, said that Shell was delisted as one of the winners because it failed to submit a written statement about its preparation for the distribution of subsidized fuel on Oct. 26,2009 at the latest before BPH Migas gave them a final approval to sell the fuel.

?Only Petronas and AKR Corporindo have submitted the written statement,? he said.

Earlier, Shell?s General Manager for Retail Sammy DeGuzman said in Jakarta on Friday that the company was still discussing with BPH Migas on the possibility of increasing its role in the distribution of subsidized fuel.

Meanwhile Shell Indonesia's President Darwin Silalahi said that Shell and other private fuel distributors should be allowed not only to distribute subsidized fuel outside Java, but also in Java and Bali. ?If we are allowed only to sell (subsidized fuel) outside Java, it will restrict our business expansion plan,? he said.

Last week, three private fuel distributors including IDX-listed firm PT Aneka Kimia Raya (AKR) Corporindo, Shell Indonesia and Petronas have won the tender to sell subsidized fuels in Sumatra and Kalimantan, beginning next year.

AKR won the rights to sell 109,160 kiloliters of subsidized diesel a year in North Sumatra?s cities of Medan and Deli Serdang, and several areas in Lampung including Metro, Central Lampung, East Lampung, South Lampung, North Lampung and Bandar Lampung, as well as in Pontianak and Banjarmasin in Kalimantan.

Shell was awarded the rights to sell about 5,110 kiloliters of subsidized Premium gasoline a year in Medan, while Petronas will sell 20,440 kiloliters of subsidized Premium gasoline a year in Medan.

Tubagus said that the three companies should submit a written statement about their preparation for the distribution of the subsidized fuel on Oct. 27 at the latest before BPH Mugas gave them a final approval to sell the fuel. ?If they are not ready, their distribution rights will be revoked,? he added. (godang)