An energy expert has reminded that blending of fuel oil that would be sold to the public must be held at oil refineries and not at marketing depots in order to meet safety and quality standards.

Executive Director of the Center of Energy and Resources Indonesia (CERI), Yusri Usman, said refineries are equipped with specialized facilities and strict monitoring systems that will ensure the required standards are met.

"Several Pertamina refineries, such as those in Cilacap, Balikpapan, and Balongan, have facilities that allow for blending of various hydrocarbons into final products like Pertamax and Pertalite," Yusri said on Friday , February 28, 2025, while referring to two fuel oil products of the State energy company PT Pertamina with Research Octane Number (RON) 92 and 90 respectively.

He quoted testimonies of two retired Pertamina refinery directors that fuel oil blending at refineries is a standard procedure that should be followed to maintain its quality.

He cited, however, that the recent corruption case revealed by the Attorney General's Office in February 2025 indicated that fuel blending was allegedly conducted at marketing depots or at facilities belonging to PT Orbit Terminal Merak, a private company reportedly having depots for imported fuels.

"This is an unusual practice, as depots should only serve as storage and distribution facilities, not as production or blending sites," Yusri said, while adding that such practice is against the blending permit regulation issued by the Directorate General of Oil and Gas at the Ministry of Energy and Mineral Resources (ESDM).

According to Yusri, blending at depots is suspected to have been done to unofficially enhance fuel quality, such as altering RON 90 to RON 92. This practice could harm both the state and consumers, as the products sold might not meet the required specifications.

"Blending at refineries follows standardized procedures, using digitalized equipment and quality control laboratories certified with octane testing machines identical to those used by Lemigas, an independent laboratory," Yusri said.

"Fuel blending outside refineries constitutes a deviation from standard procedures and may indicate larger issues, such as price or quality manipulation. The ongoing investigation suggests that such irregularities could have widespread economic and technical consequences," Yusri added.

Stronger oversight

In reference to the two retired Pertamina refinery directors’ pratical experience, Yusri said Pertamina Patra Niaga as the commercial and trading subholding of Pertamina should only receive finished fuel products or, if cost efficiency is a concern, implement proper production methods.

"Imported fuel could be sent to refineries for blending, with the blending fees allocated to the refinery. Blending should not be outsourced to third parties with inadequate facilities and non-standardized quality control methods, as this poses a high risk of fraud regarding fuel quality," he said.

He urged authorities to inspect the infrastructure of third-party blending facilities to determine whether they meet proper standards and whether their fuel quality has been verified by Lemigas.

Merging refining and marketing operations

Looking ahead, Yusri suggested that all production and procurement should be handled by refineries, while Patra Niaga should focus solely on fuel distribution.

"Alternatively, Pertamina's refining and marketing operations could be merged into a single downstream sub-holding entity, making it a complete business unit responsible for both production and sales. No producer should be restricted from selling its own product," he said.

As for Pertamina International Shipping (PIS), Yusri stated that merging it into the same entity is unnecessary at this stage, as transportation services can be outsourced if more cost-effective.