REPUBLIKA.CO.ID, JAKARTA – Government starts considering the possibility to build its own oil refinery as the talks with Middle East investors about the building of Balongan and Tuban refineries stagnate. Building refinery with state fund was more favorable than fulfilling huge incentive demands from foreign investors, acting Head of Fiscal Policy in the Ministry of Finance, Bambang PS Brodjonegoro, said.

“Their demands are extra ordinary, starting from tax holiday by five percent, free local tax, to oil price,” Bambang PS Brodjonegoro said on Wednesday.

Earlier Pertamina invited Middle East investors from Kuwait Petroleum International Company (KPIC) to work on Balongan Refinery in West Java and Saudi Aramco Asia Company Limited (SAAC) to work on Tuban Refinery in East Java.

The Vice President Strategic Planning Business Development and Operator Risk Refining in Pertamina, Ardhy N Mokobombang, said the partnership with the two companies would be continued.

Yet, he explained that Pertamina still studied the incentive with the investors. Mokobombang said that the building of the own refinery was hard. Even with the parnership with KPIC and SAAC, the investment can reach 12 billion USD. With that investment, the refinery will also be connected with petrochemical to increase the economical value.

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