INSA calls for change in lubricant trading

JAKARTA (JP): The Indonesian Shipowners Association (INSA) called on state oil and gas company Pertamina yesterday to change its lubricant trading system to ensure a continuous supply to association members.

Association secretary-general Barens Th Saragih said association members should be allowed to directly buy lubricants from Pertamina's supply depots.

Currently, the members are obliged to buy lubricants through Pertamina dealers.

This change in the trading system would guarantee the supply to all of the country's shipowners, he said.

"I think this proposal is reasonable because shipping companies are all regular and big buyers," Saragih told The Jakarta Post.

He said a ship needed up to 13 barrels of four types of lubricants per month.

The association has about 700 members.

Saragih made the remarks following complaints from several shipowners that they could not buy lubricants from Pertamina's dealers over the past week due to a lack of supply.

He said three shipping companies have filed protests with the association over the lack of supply but he believed many others experienced similar problems without filing complaints.

"The companies which complained are those which ply domestic routes. Local ships which travel on international routes don't share the problem since they may buy lubricants in Singapore if they can't buy them on the domestic market," Saragih said.

Saragih said the complaining shipowners repeatedly ordered lubricants from Pertamina dealers over the past week but the dealers claimed that Pertamina had yet to resupply them.

The dealers said Pertamina refused to send them new supplies unless they signed a statement promising not to withhold lubricants to gain greater profits from increasing prices in the future.

Saragih said the dealers signed the statements, but Pertamina did not immediately send new lubricants to them until it felt sure that the dealers would hold to their promise.

Pertamina currently limits the sale of lubricants following reports that speculators have been buying up large quantities of the commodity in the hope to gain profits as prices continue to rise due to the economic crisis.

Saragih said shipowners would buy lubricants on the black market if a lack of supply continued, creating a loss for Pertamina.

"If they don't find lubricants at all, the shipowners will be forced to stop operations," Saragih said. (jsk)