Lubricant producers against import freedom

JAKARTA (JP): The Association of Indonesian Lubricant Producers (Aspelindo) has expressed concern over the government's plan to ease restrictions on lubricant imports.

The association said the import liberalization would not only hurt local producers but also consumers.

"Aspelindo supports a free market idea for lubricant trading provided that it is carried out in the spirit of protecting the national interest. But we are opposed to the idea of applying liberal scheme in the trading," association chairman A.P. Batubara told reporters on Friday.

The association was not afraid of competition with foreign companies, he said, but it feared that free importation of lube oils, as demanded by the Association of Indonesian Lubricant Importers and Distributors (Perdipi), would lead to an uncontrolled flood of poor-quality lubricants.

Inferior lubricants, Batubara said, would disrupt prices of lubricants on the local market at the expense of local producers and could damage automotives and other motorized vehicles.

He said there were hundreds of lubricant brands on the international market and the public, which is mostly ignorant of the quality of each brand, could be easily duped into buying inferior lubricants.

"We are mostly concerned with the interest of consumers. Free import of lubricants is not suitable at present when the law on the protection of consumer rights is still nonexistent in the country," Batubara said.

Perdipi earlier called on the government to revoke the 1988 presidential decree No. 18 which grants exclusive rights to state oil and gas company Pertamina and several other local companies on the production, distribution and importation of lubricants.

They said the monopoly was no longer suitable in the era of reform.

Minister of Mines and Energy Kuntoro Mangkusubroto earlier voiced support of Perdipi's concern, saying he looked forward to the issuance of a new presidential decree which would scrap the monopoly in the near future.

According to Batubara, aside from Pertamina, the government has given licenses for the production of lubricants to several private companies, including PT Wiraswasta Gemilang Indonesia, PT Dirga Buana Sarana, PT Agip Lubrindo Pratama, PT Cemerlang Pelumas Prima and PT Panutan Selaras.

However, Perdipi accused the companies of obtaining the licenses during former president Soeharto's era based on their links to Soeharto's children and cronies.

Batubara said Pertamina and the private lubricant producers had production capacity of 500 kiloliters per year, higher than the domestic demand of 400 kiloliters per year.

"We don't see any need to import lubricants at present due to the oversupply in the country. But if there is a lack of supply in the future, we don't disapprove of lubricant imports," Batubara said.

"But, we want the importers to cooperate with Aspelindo in checking the quality of the imported lubricants at our laboratories before selling them to the public," Batubara said, promising that the check would be free of charge. (jsk)