RI records $1b oil trade deficit in Q1
Urip Hudiono, The Jakarta Post, Jakarta
Despite strong gas exports helping to keep Indonesia's overall oil and gas trade account in the black, the country is still on a trend of becoming a net oil importer, already booking more than US$1 billion oil trade deficit during this year's first quarter.
Responding to inquiries on the subject from the House of Representatives' Commission XI for financial affairs, Minister of Finance Jusuf Anwar said in a written statement on Monday that Indonesia's oil and gas trade account had as of March actually recorded a surplus of US$642.2 million.
In terms of oil trade alone, however, Indonesia is still experiencing a $1.37 billion deficit, due to the country's high oil import needs and declining oil production at home.
Oil trade includes the exports and imports of crude oil, as well as refined oil products.
As comparison, data from the ministry shows that Indonesia's oil trade deficit stood at $3.73 billion last year, although the country in overall managed to enjoy a surplus of $3.96 billion in its oil and gas trade, due to a high $7.69 billion surplus in gas trade.
The cause of the deficit mainly lies in Indonesia's high import needs of refined oil products, as the country has actually been able to maintain a meager export advantage in its crude oil trade.
A member of the Organization of Petroleum Exporting Countries (OPEC), Indonesia allocates most of its high-grade crude oil production for exports, whose proceeds are used to finance the main bulk of its state budget.
The country then imports cheaper crude oil, mostly from the Middle East, to be processed at its local oil refineries, for domestic consumption.
Due to increasing consumption of fuel and oil products, plus a lack of locally refined oil producers, Indonesia has apparently imported more than it can produce.
The government has earmarked an oil production of 1.125 million barrels per day for this year's state budget, up from 1.075 million barrels per day last year.
With such a production level, the government is expecting a gross oil revenue of some Rp 103.55 trillion (about $10.9 billion) this year, at a crude oil price of $35 per barrel and a rupiah exchange rate of Rp 8,900 per U.S. dollar.
Data from the Ministry of Energy and Mineral Resources shows that the country's oil production reached an average of 1.070 million barrels per day during this year's first three months.
Meanwhile, Jusuf also explained that the government's revenue from domestic fuel sales is expected to increase by some Rp 20.34 trillion this year. The figure comes from the Rp 99.62 trillion the government will receive due to the recent domestic fuel price hike, as compared to Rp 79.28 trillion it should have received under the previous fuel prices.
The government hiked fuel prices by an average of 29 percent in March to help decrease the country's bloating fuel subsidies from Rp 60.1 trillion to only Rp 39.8 trillion.