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."