May 18, 2020 / 10:34 AM / 15 days ago

Indonesia government allows Pertamina to sell unblended diesel to retailers

FILE PHOTO: A Pertamina fuel station in Labuan Bajo on Flores Island, Indonesia April 7, 2018. REUTERS/Henning Gloystein

JAKARTA (Reuters) - Indonesia’s Energy and Mineral Resources Ministry has issued a circular letter saying state oil company PT Pertamina is allowed to sell unblended diesel fuel to other fuel retailers, an official said on Monday.

The latest circular backed up an earlier rule by the ministry that asked importers to buy diesel fuel from Pertamina due to high excess supply of the fuel as the coronavirus outbreak slashed demand.

The ministry lets Pertamina to sell diesel fuel without blending them with palm-based fuel, said Andriah Feby Misna, bioenergy director at the ministry said.

The retailers however, must blend the fuel with fatty acid methyl ester (FAME) made from palm oil before distribution, she added.

Indonesia currently has a mandatory use of biodiesel with minimum 30% FAME content.

She said Pertamina is allowed to sell up to 1.95 million kilolitres of unblended diesel to retailers this year.

Last month, the energy ministry said Pertamina had an excess of 2.4 million kilolitres of diesel for the rest of the year as the company sees historic fuel sales drop after the country set up measures to curb spread of coronavirus.

Reporting by Wilda Asmarini; Writing by Fransiska Nangoy; Editing by Louise Heavens

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