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Home arrow Countries arrow Indonesia arrow RPT-Pertamina may stop fuel to Indonesian power firm
RPT-Pertamina may stop fuel to Indonesian power firm PDF Print E-mail
JAKARTA, Oct 2 (Reuters) - Indonesian state oil firm Pertamina may stop supplying oil products to state electricity company PT Perusahaan Listrik Negara (PLN) because of differences over price, a Pertamina official said on Tuesday.
 The official, who declined to be identified, said Pertamina wants PLN to pay a 9.5 percent premium to international prices, while PLN wants to pay 5.0 percent.

"Pertamina and PLN have differences on the price. Pertamina wants a profit, but with just a 5 percent margin, Pertamina will suffer," the official said.

"The government is still looking for ways at the moment to solve these differences as both are state firms."

A PLN official, who declined to be identified, said the utility would look to other oil product suppliers if Pertamina stopped supplies.

"We will open tender to look for other oil product suppliers, if Pertamina stops supplying us," the PLN official said.

The official said PLN was expected to consume 10 million kilolitres (62.8 million barrels) of oil products this year, after using 9.2 million kl in 2006.

PLN is expected to consume less oil products of around 9 million kl next year, as its power plants use more gas and coal.
 
 PLN has a monopoly over power supply in Indonesia and operates 24,000 megawatts of capacity, but most of its plants are ageing, and daily output is far below capacity. Some 30 percent of the plants use oil products such as diesel and fuel oil, which are hovering under record-high levels.

Pertamina did not indicate any requirements for fuel oil in its latest import schedule for October, industry sources had said.

Global crude oil prices (CLc1: Quote, Profile, Research) have climbed 31 percent this year and hit a record above $80 on Sept. 20 on supply worries ahead of peak winter demand, and the Indonesian government recently said it did not plan to raise domestic subsidised fuel prices.

The government is set to spend 56.4 trillion rupiah ($6.21 billion) subsidising oil in 2007. Non-fuel subsidy is 48 trillion rupiah in 2007, which include subsidies for PLN. Indonesia, which has nine oil refineries with a combined capacity of around 1 million bpd, is Asia's top diesel and gasoline importer. Despite being Asia Pacific's only OPEC member, about 30 percent of Indonesia's oil products are imported. 

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