RI crude price change likely to be accepted

RI crude price change likely to be accepted

TOKYO (Reuter): Indonesia's state oil company Pertamina may
alter its crude oil price formula but traders said yesterday that
it would probably not change their buying patterns greatly as the
low sulfur crudes were a necessity.

"We can't stop buying because the prices are higher when
Indonesian crudes are concerned," one refiner said. "Demand is
too great for that."

Currently, Pertamina calculates its monthly crude prices
relying 50 percent on APPI, a market benchmark. The other 50
percent spot component relies 50 percent on APPI, 30 percent on
Platt's and 20 percent on RIM.

However, Pertamina was considering dropping the 50 percent
APPI influence in the spot portion, increasing the influence of
Platt's and Rim, traders said.

They said that under the new pricing system, crude prices
could be 10 to 20 cents higher than current levels.

Japanese refiners who have contracts with Pertamina said they
would discuss the pricing change at the 1996 Buyer Forum in
Indonesia, which starts on March 7 and lasts for three days.

"The buyers, who are not just refiners but also traders and
utilities, will object to the change but whether that will make
Indonesia stop the change is up in the air," one trader said.

"We will just have to pay more for the crude in the end, if
they decide to go through with it," he said. "We haven't much
choice."