Pertamina reduces fuel imports due to low demand

JAKARTA (JP): The state-owned oil and gas company Pertamina has reduced fuel imports in line with a drop in domestic demand during the economic crisis, company spokesman Ramli Djaafar said yesterday.

Ramli said the demand for fuel products like diesel had also decreased significantly as many industries had reduced activities and people were using their cars less as part of efficiency programs to cope with the monetary turmoil.

He denied reports that Pertamina had reduced fuel imports due to financial problems or in line with government measures to cut back on foreign exchange spending.

"The reason for the cut in imports is merely the decrease in demand. In such a situation, Pertamina prioritizes the sale of its products over the imported products. That is why we reduced the imports," he said.

The nation consumes 52 million kiloliters of fuel annually, 80 percent of which is supplied by the firm's refineries, according to Pertamina data.

The company is the largest crude oil exporter in Southeast Asia but imports 20 percent of its fuel for the domestic market from Southeast Asian countries, including Singapore and Thailand, and the Middle East.

Pertamina's imports are handled by its affiliates Pacific Petroleum Trad Co. Ltd, Perta Oil Marketing Ltd and Permindo Trading Oil Co. Ltd.

A Ministry of Mines and Energy official, who wanted to remain anonymous, said recently that Pertamina faced a cash-flow problem which affected its ability to import fuel.

The official said Pertamina received revenue from the sale of fuel domestically in rupiah but purchased fuel from abroad in dollars.

The monetary crisis, which has reduced the value of the rupiah by 75 percent against the United States dollar, has made it difficult for the company to convert its rupiah revenue into dollars.

Company president Soegianto has denied any cash-flow problems, saying the company was still able to obtain dollars from the market.

"There is no such cash-flow problem," he said. "We still have sufficient stocks of fuel in the country until March." (jsk)