RI oil-product imports seen slowing in 1998
RI oil-product imports seen slowing in 1998
SINGAPORE (Reuters): Indonesia's petroleum product imports are
expected to fall in 1998 due to an increase in the country's
refining capacity and a slowdown in consumption, industry sources
said yesterday.
The sources said Indonesian authorities would also try to keep
a lid on imports to keep down costly U.S. dollar expenses as the
country grapples with the fall in the value of the rupiah.
Industry sources estimated that imports of the three key oil
products--diesel, jet-kerosene and fuel oil--would decline by
about five percent over 1997 levels.
"There must be a direction from the finance ministry for
state-run companies to reduce U.S. dollar expense," one industry
source said.
State-owned oil monopoly Pertamina imported 71.8 million
barrels of fuel products in fiscal 1996/97 (April-March).
"I think imports in 1997/98 will be about the same as the
previous year," one Pertamina official said.
Traders said Indonesian imports in the first eight months of
the fiscal year to November were well above the previous period,
largely because more imports were needed to cover lost production
during a series of refinery shutdowns going back to July.
But now that the refineries are back in operation, with
expanded production capacity, imports for the next four months
should be below the monthly average, they said.
Traders estimated monthly diesel purchases, the largest
product imported, would fall to around three million barrels from
an average of four million barrels.
Diesel imports peaked at over seven million barrels in
October, which compared with the past four month imports
averaging at a high five million.
The large imports were due to the shutdown of several
refineries for regular maintenance and refurbishments.
As a result of the upgrading work, Indonesian refining
capacity has grown to 1.05 million barrel per day (bpd) from
989,000 bpd.
Industry sources said that aside from the supply surge, a fall
in demand was also anticipated next year because of a slow down
in the Indonesian economy.
The austerity measures imposed by the International Monetary
Fund as a condition on its initial US$23 billion bail out package
will lead to stagnant oil demand growth in 1998, one trader said.
Oil product consumption was forecast by traders to grow
between four and five percent in 1998.
Indonesia's economic growth is expected to slow to between 5-6
percent in the fiscal years 1997/98 and 1998/99, planning
minister Ginandjar Kartasasmita said on Monday.
The economy was originally expected to grow by more than seven
percent.
The sources said Indonesia's long term target to optimize jet-
kerosene and diesel production at all its refineries would also
eat into imports.
Indonesia is currently processing more of its own crude and is
cutting back on imports as part of the IMF austerity measures and
an earlier internal decision by Pertamina to reduce its reliance
on outside sources.
Traders said the first crude imports that will be cut are
those that yield less jet-kerosene and diesel.
Indonesia currently exports around 760,000-800,000 bpd of
crude and imports about 200,000 bpd of Middle East, Malaysian and
Australian crudes.