Facing increasing competition in the retail gasoline sector, state oil and gas firm PT Pertamina plans to increase the number of gas stations selling high-quality biofuel, known as Biopertamax, from 1 at present to 24 by the end of this month.
Biopertamax will be available in 15 more gas stations in Jakarta, five in Surabaya and three in Malang, East Java. The only gas station currently selling Biopertamax is located in Senayan, South Jakarta.
The retail price of Biopertamax is Rp 5,600 (61 U.S. cents) a liter.
Djaelani Sutomo, Pertamina vice president for fuel sales and distribution, said the company would have to increase its orders for ethanol in order to meet the increased demand.
Ethanol, which is produced from sugarcane and cassava, is one of the basic components of biofuel.
"We are still awaiting a letter from the Industry Ministry responding to the requests submitted by ethanol producers to increase their supplies to Pertamina," Djaelani said Friday.
Under a government decree, Pertamina has been given the sole right to purchase ethanol from domestic suppliers.
Pertamina's move will increase competition in the retail gasoline sector, following the arrival of new competitors that also focus on high-octane premium gasoline.
Last month, the local arm of Royal Dutch Shell Plc. opened its seventh gas station selling high quality fuels in North Jakarta, which will be followed by another one in Senen, Central Jakarta.
A number of foreign-owned companies have begun operating in Indonesia's downstream oil and gas sector since it was liberalized somewhat in 2005, ending Pertamina's long-standing monopoly over a number of fuels.
However, Pertamina continues to hold a monopoly on the sale of subsidized fuels.
U.S-based energy company PT Chevron Pacific Indonesia (CPI) and France-based Total E&P have also announced they will open gas stations in Indonesia. Both are in the process of securing the necessary licenses from the government.
Responding to the competition, Djaelani has said that Pertamina would open 1,000 new gas stations across the country, adding to its current network of 3,500 stations.
Besides Shell, Malaysian state oil and gas firm Petroliam Nasional Bhd. (Petronas) has also opened gas stations in Indonesia.