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Government tells private firms to buy Pertamina’s fuel
The government has strongly urged private distributors to buy diesel fuel from state energy giant Pertamina as long as it meets their required specifications, a high-ranking official has said
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span>The government has strongly urged private distributors to buy diesel fuel from state energy giant Pertamina as long as it meets their required specifications, a high-ranking official has said.
The Energy and Mineral Resources Ministry’s acting oil and gas director general, Djoko Siswanto, said the measure had been taken as Pertamina had an excess of diesel fuel.
“Yes, it’s because of that [Pertamina’s excess diesel supply]. It will be kept in place until there is no longer a supply excess,” he told The Jakarta Post on Wednesday.
Pertamina corporate communication vice president Fajriyah Usman gave only a short response when asked about the firm’s excess supply.
“Pertamina is ready to cater to demands from all domestic parties,” she said on Friday.
Rumor has it that the government has postponed the issuance of fuel import permits to private distributors and has urged them to buy diesel fuel from Pertamina, despite possible differences in the fuels’ specifications. Djoko has denied the rumor.
On Monday, he said the government could urge private fuel distributors to buy excess supply from Pertamina in a business-to-business scheme. However, it would still grant import permits to distributors if their required fuel specifications were different from that of Pertamina’s, which has a cetane rating of 48.
United States-based energy firm ExxonMobil was the first distributor to be issued a fuel import recommendation letter from the ministry. The Trade Ministry will process the letter prior to issuing an official import permit.
According to an energy ministry document circulating among the media, ExxonMobil’s local downstream subsidiary PT ExxonMobil Lubricants Indonesia received a recommendation to import 800,320 kiloliters of diesel fuel for the whole of 2019.
It is a revision of a previous recommendation in January that allowed the firm to import 226,100 kl of diesel fuel or just 28.2 percent of the newly recommended volume.
According to Statistics Indonesia (BPS) data, diesel fuel imports stood at 1.9 million tons as of June, 38.72 percent lower year-on-year (yoy).
“Formally, I’ve yet to get proof [of fuel import permit limitations], but it could be there because of a policy to prioritize the [purchase of diesel] supply from Pertamina as long as it has it,” said Henry Achmad, a Downstream Oil and Gas Regulatory Agency (BPH Migas) committee member.
“However, if the price [of Pertamina diesel] is competitive with imports, I believe they [private fuel distributors] will be OK with it,” he added.
On the other hand, Jakarta-based mining research group ReforMiner Institute’s executive director, Komaidi Notonegoro, expressed confidence that the reason for limiting fuel imports for private fuel distributors was to help stabilize the rupiah.
“And it’s not new diesel supply, but old Pertamina stock,” he said.
Local arm of Netherland-based energy firm PT Shell Indonesia declined to confirm whether Shell had experienced difficulties in getting a fuel import recommendation.
“Regarding product requirements, our focus is to continue to look for fuel supply options that meet Shell’s quality standards and of course in terms of commercial competitiveness,” vice president of corporate affairs Rhea Sianipar said on Wednesday.
