Government's plan to liberalize fuel trade welcomed
Government's plan to liberalize fuel trade welcomed
JAKARTA (JP): The Indonesian Petroleum Association (IPA)
yesterday welcomed the government's plan to allow privately-owned
oil refiners to sell their products domestically, thereby
breaking the monopoly of the state oil firm Pertamina.
"That's what we've been waiting for for a long time," Baihaqi
H. Hakim, a director of the association, told a press conference
yesterday.
Secretary-general of the Ministry of Mines and Energy Umar
Said told a press conference last week that the government will
submit to the House of Representatives by the end of this year a
new bill allowing private refiners to sell their products
domestically on the condition that the crude is imported.
Baihaqi, who is also chairman of the association's 24th annual
convention, said that even though the planned bill is not
included in the convention's agenda, "I'm sure the participants
will talk about it."
The convention will be held at the Jakarta Convention Center
on Oct. 10 to Oct. 12. IPA currently has 55 members operating in
oil exploration and production, and 151 associate members
operating in services supporting the oil industry.
Baihaqi said that the opening of the domestic sales of
refinery products for the private sector will be an incentive
that will attract more foreign investment in the oil industry.
Tough competition and the small return on investments have
hampered the growth of investments in the oil industry, said
Baihaqi, who is also president of PT Caltex Indonesia, a U.S.
company which produces about half of Indonesia's crude oil output
of 1.3 million barrels per day.
Baihaqi said that IPA members will be interested in the
trading of refined products on the domestic market.
Caltex, which currently operates a huge oil concession in Riau
and a lubricating plant in Medan, North Sumatra, may also be
interested in building an oil refinery and selling its products
domestically.
The chief of Pertamina's foreign contractors coordinating
board, Zuhdi Pane, said that the company will also suggest that
the government lower the tax rate on its income from 60 percent
-- under Law No. 8/1971 -- to 30 percent under the new bill.
"If we were treated like other companies in terms of taxation,
we would be ready to compete with the private sector," said
Zuhdi, who also attended yesterday's press conference.
Pertamina currently operates eight refineries with a total
processing capacity of 822,000 barrels per day to meet most of
the domestic demand for fuel. However, Indonesia still has to
import diesel oil and kerosene from Singapore.(04)