Shell unit wins license to distribute fuel in RI

The Jakarta Post, Jakarta

The Ministry of Energy and Mineral Resources issued licenses to six companies including the local unit of Royal Dutch/Shell Group to distribute fuel here, an industry official said.

The head of the downstream oil and gas supervisory body Migas, Tubagus Haryono, was quoted by detik.com as saying on Tuesday the six companies were PT Sigma Rancang Perdana, PT Pandu Selaras, PT Elnusa Petrofin, PT Elnusa Harapan, PT Raven Sejahtera and Shell's PT Krida Petragraha.

"In principle, the directorate general of oil and gas (at the ministry) has given the licenses," he said.

He said Singapore Petroleum Company, which has also expressed interest in entering the retail sector, had not yet obtained a license because the company did not have a local entity.

Since the introduction of a new oil and gas law in 2001, the private sector is allowed to distribute fuel products in Indonesia, a move that ended the decades long monopoly of state oil and gas firm PT Pertamina.

Tubagus said the six companies were expected to start their operations after a government regulation on the oil and gas downstream sector was issued.

He is uncertain when the regulation will be issued, saying only that it will be issued along with a regulation on the upstream sector.

He said the regulation on the downstream sector was still in the process of being completed.

Tubagus also said that under the regulation, the new players would be allowed to import fuel or purchase it from Pertamina.

But the regulation will require the companies to set up stockpile facilities here.

Tubagus also expects the entry of new players in the domestic fuel distribution business could begin earlier than the 2005 target.