Caltex interested in supplying fuel to RI

Leony Aurora, The Jakarta Post, Jakarta

Oil producer Caltex has expressed interest in supplying and retailing fuel here, and has submitted an application for a business permit.

Erie Soedarmo, downstream oil and gas director at the Ministry of Energy and Mineral Resources, said on Monday the company would sell all types of fuel products, including transportation fuel.

"We are processing the application," he said, while declining to say how long it could be before a license was issued.

According to a new oil and gas law enacted in 2001, state oil and gas firm PT Pertamina will no longer hold a monopoly over the refining, distribution and retailing of fuel, beginning in November 2005.

Erie said that Pertamina would be directly appointed to provide some 700,000 barrels of fuel per day -- roughly the current output capacity of its refineries -- for domestic consumption.

An additional 400,000 barrels per day needed to fill domestic demand will be supplied by foreign suppliers through a tender, he said.

The prices agreed upon with the suppliers may also serve as a benchmark in the government's negotiations with Pertamina, he added.

Currently, Pertamina is the sole player in the downstream oil sector and operates under a cost-and-fee mechanism -- the government pays the company fees for its services.

British energy giant BP Plc and Malaysia's Petronas are also among the foreign investors that have shown an interest in getting a piece of Indonesia's retail fuel pie. The companies have made preliminary requests for business permits.

Energy minister Purnomo Yusgiantoro has said the government will not issue permanent business permits unless investors complete several requirements, including building a certain number of gas stations within a two-year period.