Total SA to enter Indonesian retail fuel market

Total E and P Indonesie, the local affiliate of the world's second largest LNG producer France-based Total SA, is to build five gas stations selling high-quality fuels in Greater Jakarta this year, the local newspaper The Jakarta Post reported Thursday.

The move will make Total the third foreign firm to sell retail fuel in the country after Royal Dutch Shell and Malaysia's Petroliam Nasional Berhad (Petronas), following government's decision to end monopolistic retail fuel business by state oil firm Pertamina in January 2005.

Total's overall investment is expected to amount to 5 million U. S. dollars, reported the English daily.

The company is currently arranging all the permits and licenses needed to operate the gas stations.

These latest five gas stations will intensify the competition in the gasoline retail business in Indonesia, with Total going head-to-head with the three existing players in the market -- Pertamina, Shell and Petronas.

Pertamina still has a monopoly over the sale of subsidized fuels.

Currently, Pertamina and its agents operate about 3,000 gas stations throughout Indonesia, while Shell, the first foreign company to enter the retail gasoline market here, now has four gas stations.

Petronas currently operates only two gas stations, but plans to open 21 more stations in Jakarta and its surrounding areas, including Bogor, Tangerang, Depok and Bekasi, this year.

The Malaysian firm is optimistic that by the first quarter of 2011, it will have 200 gas stations across Java, Sumatra, Kalimantan and some areas of eastern Indonesia, with the overall investment expected to amount to 200 million dollars, the newspaper said, without citing sources.

Indonesia, with a population of some 220 million people, represents an attractive market for gas retailers as motor vehicles account for almost half of the national consumption of oil, which stands at some 60 million kiloliters per year.

Source: Xinhua