The Indonesian government has decided to build a new oil refinery in Tuban, East Java province, in order to overcome possible oil shortages in the future, President Susilo Bambang Yudhoyono said in Jakarta Monday.

"We have decided to build a new refinery in Tuban if the exploration and exploitation activities can be carried out both in Cepu, Central Java province and Jeruk field in Madura," Susilo was quoted by the Antara news agency as saying.

He said that the construction of a new refinery would be one of the solutions to overcome oil shortages in the future.

He said that if the new refinery was built in Tuban, more fuel depots would also be set up to support the fuel distribution system.

The government has issued 17 permits to build oil refineries. The potential investors, however, have put off the plan due to the uncompetitive price of oil at home.

"We want to push them to construct the refinery," he said.

Minister of Energy and Mineral Resources Purnomo Yusgiantoro estimated that Tuban's capacity would be about 150,000 to 200,000 barrels per day.

Source: Xinhua