Pertamina Buys 9 Petronas Fuel Stations

TEMPO.CO, Jakarta: Downstream director at the Ministry of Energy and Mineral Resources, Umi Asngadah, says that PT Pertamina (Persero) will acquire nine of 19 gas stations owned by Petronas in Indonesia.

"The process has been completed," she said on Monday, Apr 2.

Umi said the state-owned oil and gas company would gradually take over all of Petronas' gas stations, not just in Jakarta but other cities such as Bandung, Tangerang, and Medan. Umi was unwilling to quote the acquisition value.

Pertamina's director of investment planning and risk management M. Afdal Bahaudin said Petronas had offered its stations to several parties, including Pertamina.

"We will selectively choose the stations with consideration of the location and price," he said as quoted by Antara news agency.

Pertamina's VP for corporate communications Ali Mundakir said the acquisition is being finalized and is expected to be completed this year. Once acquired by Pertamina, Petronas's fuel stations will be turned into a Company Own Company Operate (COCO) fuel station owned and operated solely by Pertamina.

Since last year, the management of Petronas' fuel stations in Indonesia has been plagued by problems. As of August 31, 2012, PT Petronas Niaga Indonesia no longer supplied fuel oil to gas station managers that sell Prima 88 products.

As a result, the managers suffered a loss of at least Rp 219 billion.

Therefore, in November 2012, eight managers of Petronas gas stations sued Petronas Niaga Indonesia through the South Jakarta District Court. They demanded that Petronas pay them Rp200 billion in losses due to a non-mutual cease of fuel supply.

Petronas opened its gas stations in Indonesia in 2005, selling non-subsidized fuel including the octane 92 gasoline (Primax 92), octane 95 gasoline (Primax 95), as well as diesel fuel. However, its market share continued to decline as most consumers opted to use subsidized fuel.

Data from the Downstream Regulatory Body Oil and Gas (BPH Migas) recorded Petronas' market share in the second quarter of 2012 at just 0.5 percent, managing to sell a mere 38,300-liter of fuel across Indonesia.

Chairman of the National Association of Oil and Gas Entrepreneurs (Hiswana Migas), Erry Purnomohadi, said Petronas was unable to compete due to inefficiency. Petronas spent a large amount of capital to build gas stations and purchase land, unlike other foreign operators who opt to rent the land on a long-term basis, allowing them to make cheaper investments.

"That's what caused Petronas to shut down its operations," he said some time ago.

PINGIT ARIA | ROSALINA | FERY FIRMANSYAH