The association of fuel station owners Hiswana Migas is asking lawmakers to remove the government’s permits to allow PT Petronas Niaga Indonesia and PT AKR Corporindo (AKR) to distribute subsidized fuels, arguing that the presence of the two firms would damage the existing distributors.
Hiswana Migas is representing owners of 4,509 fuel stations and 588 fisheries diesel selling stations.
Before the government introduced that Petronas Niaga Indonesia and AKR could become involved in the distribution of subsidized fuels starting this year, Hiswana Migas had been the only private players distributing the fuels on behalf of state oil and gas firm PT Pertamina.
“Sales volume in most of the existing stations has so far always been low or lower than 10,000 kiloliters. Thus, the appointment of the two private companies as the subsidized fuels distributors will further lower the sales volume,” Hiswana Migas’s chairman Mohammad Nur Adib told lawmakers from the House of Representatives Commission VII overseeing energy and mineral resources during a hearing Monday.
Adib further asked the lawmakers to amend the law on the liberalization of the downstream oil and gas business. “We suggest the law should be amended in a bid to protect the national interest,” he said.
In the years since the law was changed in 2001, several foreign-company fuel stations became established in Indonesia’s major cities. The foreign retailers were only allowed to sell non-subsidized fuels. But, starting from this year, Petronas Niaga Indonesia and AKR have been selected by downstream oil and gas regulator BPHMigas to be involved in the distribution of subsidized fuels, which has long been monopolized by Pertamina.
BPHMigas’s chairman Tubagus Haryono said, however that the new policy would do no harm to the existing fuel stations, including those coming under Hiswana Migas. “They [Petronas and AKR] will only distribute 0.35 percent of the subsidized fuels. It’s very small,” Tubagus said.
A similar view was shared by Mohd. Ibrahimnuddin Mohd. Yunus, president director of PT Petronas Niaga Indonesia. “We will only distribute about 20,000 kiloliters and this is only in Medan. This is very small compared to the total volume distributed by Hiswana Migas,” said Ibrahimnuddin, adding that Petronas was open for cooperation with Hiswana Migas members.
Although selected to join Pertamina distributing the subsidized fuels, Petronas and AKR can only do this in limited volume and specific areas.
AKR is only allowed to distribute 56,500 kiloliters of subsidized diesel per year in Deli Serdang, Medan, Central Lampung, South Lampung, East Lampung, North Lampung, Bandar Lampung, Banjar Masin, and Pontianak. Petronas is only allowed to distribute 20,440 kiloliters of subsidized Premium gasoline per year in four fuel stations in Medan, North Sumatra.
