BPH Migas proposes tax incentives for fuel storage

Indonesia’s downstream oil and gas regulator BPH Migas has proposed that several tax-free zones be established to encourage investors to build petroleum product storage facilities in remote areas, an official said. Tax exemption would attract investors to build tanks to store their imports of petroleum products, said Erie Soedarmo, petroleum fuel director at BPH Migas. Soedarmo mentioned Kupang, a coastal town on the Indonesian part of Timor Island, and Sabang, a small island close to Aceh Province, as potential areas where such tax-free zones could be set up. Currently, most petroleum storage tanks are built and owned by state-owned PT Pertamina, which means that in many parts of the country it is nearly the sole supplier of fuel products. (October 15, 2009)