The Ministry of Energy and Mineral Resources of Indonesia has unveiled new rules aimed at attracting investors to overhaul its energy infrastructures. The country has been hit by a lack of investment in its refining sector and currently imports half of its oil product consumption.
Under the new rules, Indonesia plans to allow private investment in refineries and not to limit their production capacities. Developers will be allowed to import crude oil and and to export oil products, though a portion of refined products should still be allocated to the domestic market. They will be able to distribute their products independently or to choose a distributor (no obligation to sell their products to state-owned company Pertamina). Private companies will be allowed to sell RON88 gasoline, as long as they have trading, distribution and storage permits and approvals from the downstream regulator. So far, Pertamina has a virtual monopoly on the local retail fuel market, and Shell and Total have been limited to sell more expensive products.
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