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s the biggest shareholder in PT Trans Pacific Petrochemical Indotama (TPPI), the government has refused a provision in a debt restructuring agreement signed by the company and its creditors in December.

Coordinating Economic Minister Hatta Rajasa said a condition that required state oil and gas producer PT Pertamina to purchase fuels from TPPI at a price Rp 500 a liter higher than the market price was unacceptable. TPPI is a fuel producing company and around 70 percent of its assets belong to the state.

“If TPPI can produce fuel to be consumed domestically, then we will not have to import. However, if [Pertamina] is obliged to buy subsidized fuel from TPPI above its market price, then we will forbid that kind of situation to take place,” Hatta said.

The House of Representatives Commission VI overseeing trade, industry, investment, cooperatives, small and medium businesses and state-owned companies, also urged the government last month to cancel TPPI’s debt restructuring due to the potential Rp 20 trillion in losses inflicted on state finances.

Separately on Wednesday, Finance Minister Agus Martowardojo said that it was crucial for TPPI to accelerate its debt settlement with creditors.

“I want the debt restructuring to be finished as soon as possible. TPPI is a company owned by the state so we want to make sure that any obligation that has to be paid is properly resolved,” he said.

Based on the December agreement, TPPI is given 75 working days to pay $400 million plus Rp 1 trillion to creditors, comprising of $300 million to Pertamina, $100 million to upstream oil and gas regulator BPMigas and Rp 1 trillion to state asset management company PT PPA.

TPPI currently also owes Pertamina $406 million in cash for failing to deliver products and $183 million to be paid in automobile gas, $169 million to BPMigas and $1 billion to other creditors.

TPPI president director Honggo Wendratno said the company had won a refinancing commitment from Deutsche Bank worth $1 billion.