JAKARTA: The United Arab Emirates (UAE) is going to ship 30 million barrels of crude to Indonesia as the government scrambles to secure supplies amid spiking demands for subsidised fuels.
Djoko Siswanto, head of the Upstream Oil and Gas Regulatory Task Force, said the shipment was among the topics discussed during a Tuesday meeting between Coordinating Downstream and Energy Transition Minister Bahlil Lahadalia and UAE ambassador for Indonesia Abdulla Salem AlDhaheri in Jakarta.
“The Ambassador stated that they will ship their oil to Indonesia at up to 30 million barrels without cost, without working capital, including free shipping. It’s good news for us,” Djoko said on Tuesday.
Djoko did not elaborate on what he meant by “without cost” or explain in detail the form the agreement would take, its timeline or how it would be financed.
The news broke a day after Bahlil claimed that Indonesia no longer bought crude from the Middle East.
He said in a press briefing on Monday that he would visit “India, China and several countries” to get supply certainty.
The agreement came as the government scrambles to secure supplies amid spiking domestic demands for Ron-90 Pertalite, a subsidised gasoline brand from state-owned energy company Pertamina.
Bahlil attributed the Pertalite demand spike to price increase of unsubsidised fuels, particularly the Ron-92 Pertamax, the cheapest of Pertamina’s non-subsidised gasoline.
He also revealed in the briefing that the Pertalite reserves stood at 18 days.
To meet the increasing demands, the government planned to increase the quota for Pertalite, necessitating higher gasoline imports than initially planned.
Indonesia indeed produces oil domestically but at an extent below domestic demands that have to be addressed via import.
Its status as a net oil importer notwithstanding, the country subsidises the two most widely consumed fuel types in the country, Pertalite and diesel brand Solar.
Both are subject to nationwide annual volume quotas, with the government covering the gap between market and administered prices through direct subsidies and compensation to Pertamina. — The Jakarta Post/ANN
