Shell ready to team up with Pertamina in subsidized fuel distribution

Royal Dutch Shell Plc is ready to cooperate with state owned oil and gas company Pertamina in the production and distribution of subsidized fuel in Indonesia, a senior executive of the Dutch-Brtish oil giant has said.

"We have discussed the cooperation plan with Pertamina. We will use fuel with 88 octane content produced by Pertamina in the sales of subsidized fuel," Bruce Rosengarten, vice president for marketing of Shell Eastern Petroleum, told Kompas in Singapore on Thursday.

However, he said that in the long-term Shell would sell subsidized fuels with higher octane standard adopted by the company, which at present produces fuel with octane content of above 90.

"We will encourage Indonesian motorists to use (fuel with) high content (of octane)," he added.

Shell is the first private company entering the company's fuel retail market following the removal of the exclusive rights given to Pertamina in 2005 as part of the liberalization of the country's fuel retail market.

But Pertamina continues to hold the exclusive rights in the distribution of subsidized fuels as private companies including foreign oil firms could not meet the government's tight requirement. (*)