Presidential decree on private refineries issued<\/p>\n
JAKARTA (JP): The government has issued a presidential decree
\nto encourage the development of privately owned refineries in
\norder to fulfill the country's increasing demand for fuel.<\/p>\n
According to the presidential decree dated July 31, private
\nrefineries can be set up by Indonesian companies after receiving
\npermission from the President.<\/p>\n
They may also develop refineries in partnership with foreign
\nfirms or with state-owned oil and gas company Pertamina.<\/p>\n
Pertamina, according to the new decree, should get approval
\nfrom the Governmental Board of Commissioners to buy stakes in
\nprivately owned refineries.<\/p>\n
The decree states that Pertamina will remain the sole
\ndistributor of fuel in the domestic market, but private
\nrefineries can export fuel not needed by Pertamina.<\/p>\n
The decree says private refineries are allowed only to handle
\nthe marketing of their non-fuel products on both the domestic and
\ninternational market.<\/p>\n
The decree also states that Pertamina will enter long-term
\ncontracts to buy fuel products from private refineries at
\ninternational market prices.<\/p>\n
Indonesia has long encouraged the private sector to build new
\nrefineries, but without much success because of a lack of concise
\nguidelines.<\/p>\n
To date, more than 30 companies have applied for licenses to
\nbuild refineries in Indonesia. About dozen of them have received
\npermission to build the facilities. However, none have begun
\nconstruction.<\/p>\n
Observers said the reasons why they were slow in building
\nrefineries were because Pertamina was not prepared to guarantee a
\ncrude oil supply and it could not commit itself to buying the
\nfuel produced by private refineries.<\/p>\n
Observers also said private refiners were not keen to export
\ntheir products because the region was already well supplied by
\nrefineries in Singapore, South Korea the Middle East and Europe.<\/p>\n
Pertamina currently operates eight refineries with a combined
\ncapacity of 989,500 barrels per day.<\/p>\n
Pertamina's chairman, Faisal Abda'oe, recently said in a
\nhearing with House of Representatives Commission VI for industry
\nand mining that domestic fuel consumption grew 6 percent to 50.19
\nmillion kiloliters in 1996\/1997, 22.5 percent or 11.34 million
\nkiloliters of which was imported. (jsk)<\/p>",
"url": "https:\/\/jawawa.id\/newsitem\/presidential-decree-on-private-refineries-issued-1447893297",
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