Petronas, BP to sell fuel in Indonesia

Fitri Wulandari, The Jakarta Post, Jakarta

The government may issue a temporary permit for British energy giant BP Plc and Malaysia's Petronas next month to sell fuel products in this country.

Erie Soedarmo, downstream oil and gas chief at the energy ministry said the companies would be able to sell the entire range of fuel products here.

"We expect principal approvals for BP and Petronas to be issued in July. The products would range from jet fuel to whatever products they are (planning) to sell," Erie told The Jakarta Post recently.

Temporary licenses would enable them to talk to lenders and banks to start business, he added.

The initial approval would be effective for two years before the government could decide on giving a permanent license to them.

"When they have shown clear evidence, such as land acquisition for pump station or storage facility and other financial requirements, we will give them a permanent license," Erie added.

The downstream oil and gas sector, which include refining, distribution and retail activities will be opened to all investors by November 2005 when state oil and gas firm PT Pertamina ends its monopoly in the sector. The liberalization of the sector followed the introduction of new oil and gas law in 2001.

Previously, the government has issued temporary licenses for seven fuel product retail companies and nine natural gas distribution companies.