Retailers want Petronas, AKR out of subsidized fuel market

The association of fuel station owners Hiswana Migas is asking lawmakers to remove the Indonesian government’s permits to allow PT Petronas Niaga Indonesia and PT AKR Corporindo (AKR) to distribute subsidized fuels, arguing that the presence of the two firms would damage existing distributors. Hiswana Migas represents owners of 4,509 fuel stations and 588 fisheries diesel-selling stations. “Sales volume in most of the existing stations has so far always been low or lower than 10,000 kiloliters. Thus, the appointment of the two private companies as the subsidized fuels distributors will further lower the sales volume,” Hiswana Migas’s chairman Mohammad Nur Adib told lawmakers from the House of Representatives Commission VII which oversees energy and mineral resources. Adib further asked lawmakers to amend the law on the liberalization of the downstream oil and gas business. But, starting from this year, Petronas Niaga Indonesia and AKR have been selected by downstream oil and gas regulator BPHMigas to be involved in the distribution of subsidized fuels, which has long been monopolized by Pertamina. (February 2, 2010)