Indonesia’s end of subsidies offers opportunity for fuel retailers: Reuters analysis
According to a Reuters analysis dated February from Jakarta, foreign oil companies can now find in Indonesia, which is Asia’s third biggest fuel market, opportunities to significantly increase sales of gasoline because a decade-old, government price-fixing system is changing into one of floating prices.
The news agency said that the change comes after the country’s president, Joko Widodo decided in January to end gasoline subsidies in this country with more than one million new car annual sales and forecast to become the world’s biggest gasoline importer within only three years.
Total, one of the remaining foreign participants, confirmed to Reuters its interest in pursuing expansion in Indonesia to try to take market away from state-oil firm Pertamina which is the leading gasoline retailer thanks to the subsidies which ended in January.
Another participant in the market of filling stations is Shell. Foreign stations, forced to sell at higher prices, have been relying only on sales to the upper end of the market but the end of subsidies will now make it competitive to open a new filling station offering opportunities to private companies, the analysis said.
Reuters said it could not get specific comment about the potential expansion of private foreign groups neither from Pertamina nor Shell. Pertamina sells 90% of 70 billion liters of fuel sold per year, according to Reuters.
