Indonesia imports premium from Petronas of Malaysia

State oil firm Pertamina will import premium from Malaysia's state-owned oil firm Petronas to improve local stocks and settle the fuel scarcity in East Java and Bali.

Pertamina president Baihaki Hakim said that Minister of Mines and Energy Susilo Bambang Yudhoyono would travel to Kuala Lumpur on Monday to ask for special treatment in the emergency importation of premium.

"So, we will directly import the premium," Baihaki said after meeting Susilo Bambang on Thursday. "Actually, Petronas has helped us by sending two to three cargo vessels to Indonesia, and the vessels are currently still on the way to Indonesia."

According to the director of Pertamina's general affairs, Syahrial Daud, each cargo vessel from Petronas carries around 200,000 barrels of fuel. The fuel from the two cargo vessels would be used for July and August.

With the additional premium supplies from Malaysia, Pertamina's premium stocks would increase significantly. Its stocks of fuels, that currently were enough for 18 days, would increase to the level that will be enough for 25 days of consumption.

"We will flood domestic market with the imported premium," Baihaki said.

He added that the emergency imports of fuel would still within the government's budget for fuel subsidy as it was totally for the domestic needs.

He rejected an assumption that the government had no money to import fuels that resulted in the fuel scarcity. He noted that the fuel scarcity was totally beyond expectation following the overhaul of Pertamina's Balongan refinery and the sudden drop of fuel supplies from Kuwait, where one of its refinery were caught by fire.

Meanwhile, the director of Pertamina's oil refinery, Ariffi Nawawi, said that Balongan refinery had re-started operation since July 19, with running capacity of between 60 percent to 70 percent.

"We expect that after the heating process, we expect that by the end of this month, Balongan will operate at its optimum 100 percent level again," he said. (*)