Economy Policy

Ministry considers three options for crude sales to Pertamina

The Energy and Mineral Resources Ministry is considering three options to resolve tax issues for private oil and gas companies.

Under Ministerial Regulation No. 42/2018 issued on Sept. 6, private oil and gas companies are required to prioritize selling crude to Pertamina. The policy was introduced to reduce the import of oil products from other countries.

The ministry’s oil and gas director general, Djoko Siswanto, said in Jakarta on Wednesday that the first option was to exempt oil companies from paying taxes for selling crude to Pertamina as the government did not impose taxes when the companies exported their crude to trading partners abroad.

The second option proposed by the private companies suggested that Pertamina buy crude based on the Indonesian Crude Price (ICP) plus US$1 to $6 plus 44 percent tax.

The third option was that Pertamina buy crude based on ICP plus an addition tax that private companies had to pay for sending their crude to foreign trading partners.

For Singapore, the tax is 17 percent. “Under the third option, private oil firms and Pertamina will save on transportation costs,” he added.

Djoko said the three options were being discussed at the Upstream Oil and Gas Regulatory Special Task Force (SKKMigas) before being approved by Energy and Mineral Resources Minister Ignasius Jonan. (bbn)

The Jakarta Post

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