RI oil product imports surge again, say traders

RI oil product imports surge again, say traders

SINGAPORE (Reuters): Indonesia's oil product imports are
creeping up again after it was crippled for months by the
country's worst financial crisis in decades, traders said
yesterday.

Traders estimate that Indonesia could import in May at least
three million barrels of gas oil, 500,000 barrels of jet fuel and
50,000 tons of fuel oil.

Despite their higher spot imports, Indonesia has still not
taken delivery of its last 600,000-barrel of gas oil cargo under
a lapsed one-year term contract with Kuwait Petroleum Corp (KPC),
a company source said.

"In total, I think they will buy around three million barrels
of gas oil, with 2-3 cargoes of 200,000 barrels each on fob basis
and five cargoes of 500,000 barrels each on c+f basis," said a
trader with a western oil company which is a regular supplier to
Indonesia.

"There is little doubt that they need the oil but the issue
has been their ability to pay," another trader, with a oil major
said.

"Oil is a basic ingredient for any economy."

Indonesian oil product stocks have been drawn down after its
imports were stopped in February and March due to a severe
foreign exchange crunch, traders said.

"Credit is not an issue anymore with International Monetary
Fund (IMF) and recently Singapore's backing the economy and won't
stop their purchases," a trader with a U.S. major oil company
said.

Singapore Prime Minister Goh Chok Tong on Monday detailed a
US$5 billion trade insurance scheme to guarantee Indonesia's
imports from Singapore but it was not made clear how much would
entail oil imports.

The trader confirmed selling a cargo of at least 200,000
barrels of gas oil to one of Pertamina's affiliates for end April
lifting last week at around 10 cents premium to Singapore spot
prices.

An Indonesian oil company source, meanwhile, declined to
confirm nor deny rife market speculations on the country's
purchases.

"Our buying volume is a bit sensitive in the current market
situation and even if we say it, others may not believe it," a
Perta Oil source said.

Perta and Indo oil, both affiliates of Indonesia's state owned
Pertamina are responsible for the bulk of Indonesia's monthly
imports of oil products.

The Perta source said that so far only around two million
barrels of gas oil had been bought.

"It's up to traders to use their own judgment," the source
said.

Traders said Pertamina affiliates have been sniffing around
actively for fob Singapore cargoes and may have picked up close
to 600,000 barrels of gas oil already.

In April, Indonesia was reported to have started imports again
at around 1.5 million barrels of gas oil and 100,000 tons of fuel
oil.

But some traders said that the amount of gas oil finally
committed for April could have totaled three million barrels with
some one million deferred to May.

This was still low compared to pre-crisis days when Indonesia
would regularly purchase up to four million barrels of gas oil,
two million barrels of jet fuel and 1.3 million barrels or
200,000 tons of fuel oil regularly on the spot market.