Jakarta (ANTARA News) - Downstream oil and gas regulator BPH Migas has rejected a proposal from PT. Shell Indonesia to distribute subsidized fuel in Java.

BPH Migas committee member Fahmi Harsandono said here on Tuesday that Shell would be directed to distribute subsidized fuel outside Java, especially in eastern Indonesia.

"However, it is not a final decision because BPH Migas Committee will hold a meeting consisting of nine members, who will decide about this matter," he added.

Earlier, BPH Migas head Andy N Sommeng stated that all mining companies were prohibited from distributing subsidized fuel in Java, except state-owned oil and gas firm PT Pertamina.

According to Harsandono, BPH Migas' policy is aimed at increasing the availability of subsidized fuel in areas, such as eastern Indonesia, that Pertamina finds hard to reach.

"The policy applies to several other private companies, including PT AKR Corporindo and PT Surya Parna Commerce (SPN)," he noted.

Pertamina, Shell, AKR, and SPN are the participants of a subsidized fuel procurement program conducted by BPH Migas.

"The amount of subsidized fuel targeted by BPH Migas for the year 2013 has reached 46 million kilolitres," Harsandono stated.

"Shell`s proposal to distribute subsidized fuel in Java has caused a controversy, but BPH Migas` policy is not meant to flout international norms," he explained.

"Therefore, we are going to examine this issue again. I think Shell would understand," Harsandono added.

Previously, Shell proposed to set up at least 70 gas filling stations (SPBU) in order to distribute subsidized fuel in Surabaya and surrounding areas in 2013.(*)

Editor: Heru Purwanto
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