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Minister Calls on Private Companies to Pitch Oil Refineries

Minister Calls on Private Companies to Pitch Oil Refineries
Energy and Mineral Resources Minsiter Ignasisu Jonan. Tempo/ Aditia Noviansyah

TEMPO.COJakarta - Energy and Mineral Resources Minister Ignasius Jonan said that private companies are finally allowed to develop oil refinery under Energy and Mineral Resources Minister’s Regulation No. 35/2016.

“If we build a refinery, who will serve as the off-taker? If Pertamina was to be the off-taker, then private companies must told pitch that themselves to Pertamina, instead of going through the government,” Jonan said when opening a discussion in Jakarta on Monday, December 19, 2016.

Jonan added that the government would provide a general commercial permit for private companies intending to develop an oil refinery and their own gas stations.

“Such a business and exports are allowed. If there is a requirement to meet domestic demands, it will be arranged based on the market,” Jonan explained.

According to Jonan, the total capacity of Indonesian oil refinery stands at 1.16 million barrel per day. However, the actual capacity is only 800,000 barrels per day.

Jonan revealed that Pertamina’s latest oil refinery development was conducted in Bontang. Therefore, Jonan welcomes private companies to find partners to operate their refineries.

“This is important for the oil and gas industry. In the future, we must introduce two things. The first one is efficiency, because no one can set oil prices. The second one is competitive ness. We must be able to understand the market. We can’t make something and wonder who’s going to be the off-taker,” Jonan said.

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