The Jakarta Post | Fri, 12/26/2008 5:11 PM
The downstream oil and gas regulator (BPH Migas) said Friday that fuel retailers besides those operated by state owned PT Pertamina would be allowed to sell fuel with lower octane level.
BPH Migas member Agus Budi Hartono told kompas.com Friday that retailers such as Shell and Petronas would be allowed to distribute fuels of the Octane 88 type. Pertamina currently sells the type fuel under the name Premium, which is the biggest market share holder of car fuel sales.
Agus said the new regulation was made possible by the decreasing price of global crude oil prices, which led to the decrease in the production cost of the Octane 88.
The Octane 88 fuel type currently being sold by Pertamina is subsidized by the government. However, with the decreasing oil prices, the selling price of the fuel would reach a breakeven point and may even allow Pertamina to make profit from sales.
Agus explained that if such situation persisted it would be in the interest of the other fuel retailers to distribute the type of fuel without receiving subsidy from the government.
“The existing regulation is in fact already allows them to sell Octane 88, but only if the retailers could sell it no more than Rp 5,000 a liter,” he said. (and)
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