Pertamina sees huge profit from Pertamax, Pertamax Plus

The Jakarta Post, Jakarta

State-owned oil and gas company PT Pertamina expects huge profits from its special Pertamax and Pertamax Plus fuel products as demand rises.

"The prospects are quite good, and looking ahead we want (these products) to become the backbone of Pertamina's revenue," said company spokesman Hanung Budya on Saturday.

He said that when Pertamax was first introduced in 2002, demand was only about 300 kiloliters per day. In 2003, demand had soared to 1,200 kiloliters a day for Pertamax and 350 kiloliters a day for Pertamax Plus.

Pertamax and Pertamax Plus are special fuel products containing higher octane levels suitable for newer cars. The two fuel products are promoted as helping improve engine performance and being environmentally friendly.

Hanung was responding to earlier reports that Pertamina wanted to take over the marketing of the two fuel products from the current nine distributors starting next month due to the huge profit potential.

The distributors would only retain the role of transporting the products.

Hanung said that in the future, there was the possibility that Pertamina would set up a special body to handle the marketing of the two fuel products.

Pertamina has become a profit-oriented company since being transformed into a limited liability company last year.

In 2003, Pertamina saw an after-tax profit of Rp 3.90 trillion (US$464.28 million). This year, the company expects profit to increase to Rp 5.30 trillion.

Pertamina is set to boost investment to Rp 5.9 trillion this year, from Rp 4.7 trillion in 2003. The new investment will mostly go to finance exploration efforts to increase oil and gas production both from existing fields and new fields.

Pertamina began to produce special fuel products in 1997. At the time, the products were sold under the Premix and Super TT brands. From the beginning, Pertamina assigned the marketing of the products to distributors, most of which were owned by the politically well-connected. The distributors enjoyed lucrative profits from both selling and transporting the products.