AFX Europe (Focus); Indonesia govt to auction domestic fuel distribution rights after Dec: “Currently the Indonesian unit of Royal Dutch Shell Group is the only company outside Pertamina that is selling fuel after obtaining the necessary rights.”: Tuesday November 22, 2005
JAKARTA (AFX) - The government will start auctioning to private companies the rights to distribute fuel in the domestic market once the mandate of state oil and gas firm PT Pertamina to secure nationwide fuel supply comes to an end on Dec 31, Minister for Energy and Mineral Resources Purnomo Yusgiantoro said.
"After Dec 31 the supply and distribution of fuel will be held by an enterprise through the mechanism of auctions or direct appointments," Yusgiantoro told reporters.
He gave no further explanation about the "mechanism". Currently the Indonesian unit of Royal Dutch Shell Group is the only company outside Pertamina that is selling fuel after obtaining the necessary rights.
Pertamina is tasked with supplying and distributing fuel nationwide at fixed prices, which are subsidized by the government. The subsidized fuel covers premium gasoline, diesel oil and kerosene.
Pertamina's mandate would have expired tomorrow under the original agreement but it was extended until the end of this year, Yusgiantoro said.
The state company has never managed to make a profit from its virtual monopoly rights to distribute fuel, he added.
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