Companies must have gas stations outside Java to partake in PSO<\/p>\n
Leony Aurora, The Jakarta Post, Jakarta<\/p>\n
New players in the downstream oil business will not be allowed to
\ndistribute subsidized fuel if they do not operate gas stations
\noutside Java, which could give state oil and gas firm PT
\nPertamina a de facto monopoly after the sector is liberalized.<\/p>\n
No plans for gas stations outside Java have been submitted by
\nplayers such as Royal Dutch Shell Plc. or Malaysia's Petronas,
\nwhich appear to be the most prepared to take part in the retail
\nsector, the chairman of the Downstream Oil and Gas Regulatory
\nAgency, Tubagus Haryono, said on Tuesday.<\/p>\n
\"We will not let (new players) supply subsidized fuel only in
\nJava,\" he said, adding that they appeared to be technically
\nunprepared to participate in the public service obligation (PSO)
\nby next year.<\/p>\n
\"If they are not ready, we will appoint Pertamina to
\ndistribute the fuel,\" said Tubagus.<\/p>\n
Under Law No. 22\/2001 on the oil and gas industry, Pertamina
\nwill no longer hold a monopoly on the distribution of fuel
\nbeginning on Jan. 1, 2006.<\/p>\n
The government will divide the country into four trading
\nzones: the first zone is Java and Bali; the second is Sumatra;
\nthe third is Kalimantan, Sulawesi, Maluku and Papua; and the
\nfourth is West and East Nusa Tenggara.<\/p>\n
Each province will be designated as a developed, less-
\ndeveloped or underdeveloped area. A company that wants to
\ndistribute subsidized fuel in a developed area, like Java, which
\nconsumes larger volumes of fuel, will be required to build and
\noperate gas stations in underdeveloped areas, such as Papua.<\/p>\n
Shell was the first new player to enter the market, opening a
\nretail outlet that sells unregulated high-octane premium gasoline
\non Oct. 30 in Karawaci, west of Jakarta.<\/p>\n
Subsidized-fuel distribution, however, is considered much more
\nlucrative, accounting for up to 95 percent of total fuel
\nconsumption here.<\/p>\n
Shell Indonesia's vice president for external and business
\naffairs, Wally Saleh, said the company was waiting to see the PSO
\nregulation.<\/p>\n
\"We hope to participate in the PSO as soon as possible. Let's
\nsee how the regulation is,\" he said, declining to comment if
\nShell wad ready to operate outside of Java.<\/p>\n
The Ministry of Energy and Mineral Resources is scheduled to
\nsubmit a draft of the PSO concept to the President this week. The
\ndraft is expected to be signed before Nov. 23.<\/p>\n
Tubagus said new players might want to cooperate with existing
\nprivate gas stations outside of Java -- Pertamina owns only a few
\ndozen of the some 2,600 gas stations spread across the
\narchipelago -- to speed up their retail development.<\/p>\n
He quickly added, however, that most stations already had
\nlong-term contracts of between 10 years and 30 years with
\nPertamina.<\/p>",
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"sponsor": "Okusi Associates",
"sponsor_url": "https:\/\/okusiassociates.com"
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