blog.indahnesia.com - Discover Indonesia Online

    
You are currently in > Just a blog about Indonesia > Fuel imports slump as consumption declines


Fuel imports slump as consumption declines SINGAPORE - Oil traders looking for a rebound in Indonesia’s oil demand that could resuscitate moribund diesel and gasoline markets may be in for a long wait as Indonesians have quickly learned to live with less fuel. Despite hopes for a quick recovery, consumers in Asia’s fifth-biggest oil user are burning nearly 20 percent or 200,000 barrels per day (bpd) less fuel than a year ago after the government doubled retail prices last October, industry officials say.

While richer Western citizens readily pay up for record fuel costs, Indonesia’s 220 million mostly impoverished people have had to travel less, rather than part with more of their low wages. At the same time economic growth slowed in the fourth quarter and inflation remains at double digits. “We are seeing a sharp reduction in discretionary spending and it’s really hurting. It hasn’t caused any real tension yet but it remains a risk to the economy,” said Michael Chambers, head of sales at CLSA in Jakarta. “Affordability is an issue even for people who ride motorbikes.”

A fall-off in smuggling, the start-up of a new petrochemical plant and more use of natural gas and coal by power plants will also undermine demand this year for imported fuel, which meets about a quarter of the country’s needs. State oil firm Pertamina, normally Asia’s biggest buyer of gasoline and diesel, slashed February fuel imports by 40 percent versus January to about 235,000 bpd its lowest in years as domestic inventories swelled.

It cut diesel imports almost in half to a paltry 3 million barrels and gasoline by over 20 percent, hitting spot market prices and contribute to a slump in regional refinery profits. Spending cut: “US consumers can weather the high prices better due to their larger purchasing power,” said Ibnu Bramono, an analyst from FACTS Inc. “And Chinese consumers still enjoy relatively lower fuel prices compared to international prices.”

An anticipated slowdown in demand after oil prices tripled in the past four years has yet to materialise in the West, but Southeast Asian nations have seen a sharp reaction as subsidy regimes are suddenly unwound. Domestic vehicle sales in Indonesia plunged more than 40 percent last month, the sharpest fall in four years. “The government has raised fuel prices too high. My spending is increasing not only for gasoline but also for other household needs such as rice and sugar,” said Budi Sudradjat, a motorcycle taxi driver in Jakarta.

“Almost all prices of household goods are rising, making life more difficult,” says the 27 year-old, who is struggling on a daily income of 30,000-50,000 ($3.20-$5.40) rupiah. A litre of gasoline costs 49 cents a litre, up 88 percent from a year ago. And any further hikes could spark more social tension. Former autocrat Suharto was toppled in 1998 partly after the government sharply raised fuel prices.

With economic growth slowing and industrial users scrambling for alternative fuels, some oil traders are scaling back their hopes for Indonesian demand. “Indonesian demand will take time to pick up again because the economy needs time to adapt to higher energy prices,” said a veteran trader who declined to be named. Slowing economy: Indonesia, OPEC’s only net oil importer, has about 1 million bpd of refining capacity, but is forced to import fuels such as gasoline, diesel and jet-kerosene to make up for a structural shortfall and feed a ravenous power sector.

In addition to consumer demand, purchases by the industrial sector have fallen off after Jakarta liberalised those prices last summer, with some plants switching to cheaper alternatives such as gas and coal to fire their generators. “The industry is suffering at the moment particularly at these high oil prices. Profits seem to have collapsed in private banks as fourth-quarter results were poor. All these indicate some sort of recession,” said Chambers.

“I don’t think there will be much growth this year. Our economists are looking for just 2.8 percent growth.” The economy expanded by 4.9 percent in the fourth quarter, the slowest in six quarters as the removal of fuel subsidies battered consumer spending, government data showed this week.

Indonesia’s oil consumption the proxy being the sales of products included illegal fuel exports, allegedly backed by some military personnel who resold fuel obtained under heavily subsidised prices from Pertamina’s own production or overseas purchases. The amount of smuggled oil was estimated to be as much as 120,000 barrels daily, or 10 percent of total demand.



Posted in Economy @ 19 February 2006 10:59 CET by Jeroen · 'Blog' RSS feed · permalink






There are no reactions on this blog entry yet. Be the first one to give a reaction here!


Log in to write a reaction

You are not logged in to the website. You have to be logged in to write a reaction on this blog entry.

· If you already have an account, please login.
· If you have lost your password, please retrieve it.
· If you don't have an account yet, you can create one.

    
 ABOUT THIS ENTRY
Add this blog entry to your email, your own blog, MySpace, Facebook, or whatsoever via AddThis:
Bookmark and Share

e-mail updates for this blog article

Login if you want to receive emails for reactions on this blog entry. You will receive an update as soon as a reaction on this blog entry is posted.

Your website for tickets in Indonesia!
Looking for e-tickets for flights in Indonesia? Here's your solution! Order your e-tickets at ticketindonesia.info.
 FOLLOW US ON TWITTER
 BLOG ARCHIVE
· 2015, 28 entries
· 2014, 591 entries
· 2013, 750 entries
· 2012, 1061 entries
· 2011, 792 entries
· 2010, 644 entries
· 2009, 916 entries
· 2008, 504 entries
· 2007, 725 entries
· 2006, 1014 entries
· 2005, 723 entries
· 2004, 558 entries
· 2003, 525 entries
· 2002, 375 entries
· 2001, 162 entries
 POPULAR TAGS
· gigolo
· jakarta
· blogger
Automatically generated every hour
 BLOG CATEGORIES
· General (1205 entries)
· Economy (643 entries)
· Politics (574 entries)
· Accidents (561 entries)
· Terrorism (541 entries)
· Earthquake (539 entries)
· Volcanoes (387 entries)
· Crime (357 entries)
· Corruption (349 entries)
· Flooding (278 entries)
· Elections (276 entries)
· Travel (268 entries)
· Bird Flu (254 entries)
· Religion (242 entries)
· Tourism (239 entries)
· Oddly enough ... (219 entries)
· Violence (198 entries)
· Drugs (196 entries)
· Health (192 entries)
· Aceh conflict (191 entries)
· Environment (185 entries)
· Weather (171 entries)
· Military (168 entries)
· Protests (157 entries)
· Culture (106 entries)
· Garuda Indonesia (91 entries)
· C. Sulawesi conflict (86 entries)
· Human rights (82 entries)
· Forest fires (78 entries)
· Sidoarjo mudflow (71 entries)
· Power supply (64 entries)
· Ramadan (63 entries)
· PT Freeport (55 entries)
· Picture guess (48 entries)
· Maluku conflict (47 entries)
· Dengue Fever (37 entries)
· History (37 entries)
· Infrastructure (36 entries)
· Polio (35 entries)
· Mexican flu (35 entries)
· Website (25 entries)
· Media (22 entries)
· Nuclear power (21 entries)
· Sports (20 entries)
· Sexy (16 entries)
· SARS (15 entries)
· Nightlife (10 entries)
· Others (5 entries)
· Lippo Cikarang (5 entries)
· Close smallest categories
 EXCHANGE RATES
EUR-IDR: 15,871 · 15,874  The Rupiah rate declined since yesterday
@ 18 Oct 2017 11:07 CET
JPY-IDR: 120.21 · 120.22  The Rupiah rate declined since yesterday
@ 18 Oct 2017 08:56 CET
MYR-IDR: 3,199 · 3,201  The Rupiah rate declined since yesterday
@ 18 Oct 2017 08:42 CET
SGD-IDR: 9,968 · 9,968  The Rupiah rate declined since yesterday
@ 18 Oct 2017 08:40 CET
THB-IDR: 408.23 · 408.28  The Rupiah rate declined since yesterday
@ 18 Oct 2017 08:44 CET
USD-IDR: 13,513 · 13,513  The Rupiah rate declined since yesterday
@ 18 Oct 2017 08:38 CET
Go to 'exchange rates' 
 MOST RECENT REACTIONS
·  At 19 October 2015 17:17 imambudianto5 reacted on Bank Indonesia maintains benchmark interest rate at 7.75%
·  At 04 March 2015 19:18 merdekaSah reacted on Alleged terrorists shot dead three villagers in Poso
·  At 04 March 2015 13:11 Yogya-Bali reacted on Alleged terrorists shot dead three villagers in Poso
·  At 26 February 2015 13:02 Irena reacted on Sexy, a young woman with candy
·  At 08 May 2014 09:51 jstar reacted on No alcohol should be sold in warung
·  At 01 May 2014 10:07 jstar reacted on Indonesia to be among the top 10 peacekeeping contributors
·  At 27 March 2014 05:50 harlys reacted on PPP leader voices concern over Islamic parties' future
·  At 10 March 2014 06:11 Yogya-Bali reacted on Sriwijaya Air leaves behind 200 passengers at airport
·  At 09 March 2014 00:11 Yerun reacted on Sriwijaya Air leaves behind 200 passengers at airport
·  At 08 March 2014 20:33 nicknick reacted on Sriwijaya Air leaves behind 200 passengers at airport
·  At 18 February 2014 04:17 Yerun reacted on Ash from Mount Kelud eruption spreads over all of Java
·  At 16 February 2014 05:41 Amed East Bali reacted on Ash from Mount Kelud eruption spreads over all of Java
·  At 14 February 2014 22:27 Anne Mieke reacted on Asylum seekers in Medan wish to be sent to Australia
·  At 14 February 2014 22:22 beritaislam reacted on Asylum seekers in Medan wish to be sent to Australia
·  At 16 January 2014 15:37 Anne Mieke reacted on Landslides cut off Tomohon-Manado road
·  At 16 January 2014 15:21 Yerun reacted on Landslides cut off Tomohon-Manado road
·  At 16 January 2014 15:05 Anne Mieke reacted on Landslides cut off Tomohon-Manado road
·  At 16 January 2014 14:48 Yerun reacted on Landslides cut off Tomohon-Manado road
·  At 16 January 2014 14:41 Yerun reacted on Landslides cut off Tomohon-Manado road
·  At 16 January 2014 14:29 Anne Mieke reacted on Landslides cut off Tomohon-Manado road
Go to 'forum topics' 

Created by indahnesia.com · feedback & contact · © 2000-2017
Other websites by indahnesia.com: ticketindonesia.info · kamus-online.com · indonesiepagina.nl · suvono.nl

Valid HTML 4.01 Transitional 90,986,062 pageviews Discover Indonesia Online at indahnesia.com