Pertamina maintains cash-and-carry deals

Pertamina maintains cash-and-carry deals

DENPASAR, Bali (JP): State oil and gas company Pertamina still
applies a cash-and-carry scheme for the sales of aviation fuel to
national flag carrier Garuda Indonesia and state airline Merpati
Nusantara.

Pertamina president Soegianto said here on Monday that the
scheme would be changed only if the two airline companies settled
their unpaid fuel bills.

"We are maintaining the cash-and-carry scheme to prevent them
from falling into increased arrears with us," Soegianto said at
the ceremony to receive the International Standard Organization
(ISO) 9002 certificate from the international certification
agency Societe General de Surveillance (SGS) for its distribution
and marketing unit at Ngurah Rai International Airport in
Denpasar.

Soegianto said Pertamina also applied a cash-and-carry payment
scheme for foreign airlines making irregular purchase of its
aviation fuel but regular purchasing foreign airlines may delay
payments up to one month and 10 days after a transaction.

Soegianto did not reveal on Monday the extent of Garuda and
Merpati's current debt to the company.

But, in a hearing with House of Representatives Commission V
for mines and energy, industry and trade, manpower, environment,
cooperatives and investment last July he said Garuda owed
Pertamina Rp 103 billion (US$12.8 million) in rupiah and $12.8
million in dollars, excluding fines and interest, for the
purchase of aviation fuel.

Merpati owed to the state company, excluding interest and
fines, $1.3 million for similar transactions.

Soegianto said Pertamina charged them 1 percent interest on
the dollar-denominated debt and 1.5 percent interest on the debt
in rupiah.

Pertamina started applying the cash-and-carry scheme to both
airlines in June.

Soegianto also said in July the bankrupt private airlines
Sempati Air, partly owned by former president Soeharto's son
Hutomo Mandala Putra, also known as Tommy, and golfing partner
Muhammad "Bob" Hassan, owed Pertamina $4.3 million, excluding
interest.

"We are still negotiating with the Humpuss group controlled by
Tommy on the payment of Sempati's debt," Soegianto said.

ISO

Soegianto said Pertamina would continue improving the quality
of its production, distribution and marketing system throughout
the country to meet international standards in anticipation of
the competition in the future liberalized oil market here.

The government is drafting a law on gas and oil which will
open the country's downstream sector, which is currently
monopolized by Pertamina, to foreign companies.

He said aside from the company's marketing and distribution
unit at the Ngurah Rai airport, the state company had also
received the ISO 9002 for its distribution and marketing unit at
the Soekarno-Hatta International Airport in Cengkareng and its
lube oil blending plant in Cilacap, Central Java, in April 1997
from the Netherlands-based certification agency Deutche Norske
Veritas (DNV).

He said Pertamina hoped to obtain another ISO 9002 certificate
for its liquefied natural gas (LPG) container manufacturing plant
in Jakarta in the near future. (jsk)