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KPPU probes Pertamina over high avtur price
State-owned oil and gas firm PT Pertamina is being probed by the Business Competition Supervisory Commission (KPPU) for increasing the price of aviation turbine fuel (avtur), which the KPPU deems a violation of principles of fair business practice
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tate-owned oil and gas firm PT Pertamina is being probed by the Business Competition Supervisory Commission (KPPU) for increasing the price of aviation turbine fuel (avtur), which the KPPU deems a violation of principles of fair business practice.
The KPPU believes that Pertamina is taking advantage of its dominant role in the country's avtur business, resulting in higher prices than in neighboring countries such as Malaysia and Singapore.
'The KPPU is currently gathering more evidence for this case. We will investigate in the near future,' KPPU commissioner Sukarmi said recently as quoted by kontan.co.id.
Article 25 of the 1999 Anti-Monopoly and Unhealthy Business Practices Law states that a business has a dominant position in a market when it possesses 50 or more percent of a particular service or product market.
If Pertamina is proven to have violated the law, the company could face a minimum fine of Rp 25 billion (US$2.08 million) and a maximum fine of Rp 100 billion. As an additional sanction, Pertamina officials responsible for the price hike could be sacked from their position.
Due to the high prices set by Pertamina, State-Owned Enterprises Minister Dahlan Iskan recently permitted flag carrier Garuda Indonesia to purchase fuel from foreign companies.
Meanwhile, Pertamina spokesman Ali Mundakir said that the price of avtur in Indonesia could not be compared with the price in Singapore or Malaysia because the fuel supply chain in the archipelago was more complex than in those countries. (dyl/nfo)(++++)
