Petronas to sell fuel in RI come December

Yuli Tri Suwarni, The Jakarta Post, Bandung

Malaysia's state oil and gas company Petroliam Nasional Bhd (Petronas) plans to start distributing its fuel products, which are similar to unsubsidized Pertamax and Pertamax Plus, to the Indonesian market in December.

Petronas will sell its products through five gas stations located in Greater Jakarta, president director of the firm's local unit PT Petronas Niaga Indonesia Kamarulzaman Hashim said on Wednesday.

"We have secured a license for almost a year, but the plan will only materialize this year," he said on the sidelines of the launch of Petronas' new lubricant oil.

The negotiation with the government on the specifics of the distribution plan is nearing concluded, he added.

The downstream oil and gas sector, which includes 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.

Although Petronas is only allowed to sell unsubsidized fuel products, Kamarulzaman believes that in the future the government would open the market and allow foreign investors to sell all types of fuel freely.

"This is a good investment," he said.

Each gasoline station will need an investment of about US$2 million. "We're already tendering the distribution system and equipment," he added.

Aside from Greater Jakarta, Petronas also plans to build gasoline stations in Bandung, Surabaya and Semarang.

Indonesia imports some 400,000 barrels per day of fuel products, as the country's refinery capacity of some one million barrels of oil per day is not enough to meet rising domestic demand.

Petronas produces about 250,000 barrels of fuel products per day, of which most is absorbed by the Malaysian market.