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Pertamina, Indonesia's fuel retailer, says retailers have yet to purchase gasoline due to specification concerns

Pertamina, the state-owned energy company in Indonesia, said that private fuel retailers had yet to purchase gasoline because they were concerned about fuel specifications, despite low stock levels.

Indonesia instructed private retailers last month to import more fuel via Pertamina, after Shell and BP-AKR – the operator of BP’s fuel stations – ran out of fuel after more customers began turning to them following an investigation into the quality Pertamina’s own gasoline.

Pertamina announced last week that Vivo Energy Indonesia agreed to purchase 40,000 barrels from a 100,000 barrel cargo of Pertamina's base fuel. However, the deal fell through due to concerns over the fuel’s ethanol content.

Achmad Muchtasyar, Pertamina Patra Niaga's deputy CEO, said that private gas station owners were concerned about the ethanol content of the gasoline. "There is 3.5% ethanol in the gasoline that causes private gas stations to cancel their purchase."

He said this at a parliamentary meeting, and added that Vivo initially showed interest in purchasing.

Vivo officials informed the hearing that they cancelled the sale because Pertamina couldn't meet "technical issues", without giving further details. They said that the company would be open to purchasing from Pertamina again in the future.

Vanda Laura, BP-AKR Chief Executive Vanda said that the company sought base fuel without ethanol. She added that there was no agreement reached because a certificate of source for the fuel imported from Pertamina wasn't available.

Vanda said at the hearing that "one of our shareholders operates in 70 different countries." "We must adopt international law to reduce the risk of trade sanctions. We must ensure that the product does not come from an embargoed country.

Shell, BP AKR and Vivo have said that gasoline stocks are only available in a handful of their stations and will not last more than a couple of days.

BP-AKR stated that the supply issue could force them to review their expansion plans in the coming years. (Reporting and editing by Clarence Fernandez; Bernadette Cristina)

(source: Reuters)