Kuntoro favors ending lubricant monopoly

JAKARTA (JP): Minister of Mines and Energy Kuntoro Mangkusubroto said on Tuesday he was considering scrapping state oil and gas company Pertamina's monopoly to produce, import and distribute oil-based lubricants.

"I am already in line with the idea," Kuntoro said.

He made the statement in response to the Association of Indonesian Lubricants Importers and Distributors' (Perdipi) recent call for the revocation of the 1988 presidential decree which granted Pertamina the monopoly in question.

The decree however allows private companies to produce and import synthetic lubricants.

But Perdipi chairman Paul Toar said the government had only issued licenses for the production of synthetic lubricants to companies which were linked to Pertamina and former president Soeharto's cronies and families.

The country's private lubricant producers include PT Wiraswasta Gemilang Indonesia, PT Agip Lubrindo, PT Pertajaya Lubrindo and PT Shell Nusantara.

Paul said lubricant trading restrictions had made the country's lubricant industry lag behind other countries'.

"It is a pity that despite being an oil-exporting country, Indonesia still imports lubricants, whereas Singapore, which does not have oil reserves, can export lubricants," Paul said.

Paul said the country's demand for lubricants was between 400 kiloliters and 500 kiloliters per year, 90 percent of which was supplied by Pertamina.

Pertamina data says the company supplied the local market with 376,677 kiloliters of lubricants in the 1996/1997 fiscal year and is expected to supply 390,346 kiloliters in the current fiscal year.

Pertamina produced 95 percent of the lubricants and imported 5 percent.

A Pertamina source said on Tuesday that Pertamina's lubricant monopoly had prompted people to smuggle lots of lubricants into the country, especially before the monetary crisis when domestic prices were higher than those overseas. (jsk)