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Indonesia’s Pertamina eyes extra crude oil, gasoline imports despite sales slide

Indonesia’s state oil and gas company PT Pertamina plans to import more crude oil and fuel to take advantage of cheap prices, its chief executive said on Thursday, boosting the security of its supplies despite a drop in domestic fuel sales.

Amid the global coronavirus pandemic that has driven down fuel demand and prices, the company plans to buy an extra 10 million barrels of crude and 9.3 million barrels of 92-octane gasoline in 2020, CEO Nicke Widyawati told parliament on Thursday.

“To take advantage of the decline in oil prices, we will try to optimise all available storage by adding imported stock,” she said.

Pertamina presented data at a video conference with members of parliament said that prices for imported crude were around $2-3 per barrel cheaper than domestic crude.

Pertamina also plans to import 220,000 tonnes of liquefied petroleum gas (LPG), Widyawati said.

She said the company has been seeing declines in sales since March amid restrictions imposed by the Indonesian government on movements of people in efforts to curb the spread of the new coronavirus in the country.

Pertamina’s sales of jet fuel in the March 1-April 14 period dropped to 8,640 kilo litres (KL) on average per day, down 45% compared with average daily sales in January-February.

Its average daily gasoline sales in the March 1-April 14 period fell 17% from the January-February daily average, while diesel sales dropped 8%.

“This kind of situation never happened before, this is the lowest sales in Pertamina’s history,” she said, predicting a significant impact on the company’s operations and finances.

In a “severe” scenario, if the price of Indonesian crude fell to $31 per barrel and the rupiah weakened to 20,000 rupiah per dollar, Pertamina could see a 46% slide in revenue in its upstream business compared with 2019, and a 42% drop in its downstream business.

The Indonesia crude price for March stood at $34.2 per barrel, while the rupiah, which hit 16,620 per dollar in late March, has regained some of its losses, trading at around 15,655 per dollar on Thursday.

Widyawati said Pertamina will reduce operations at its Balikpapan refinery starting this month amid falling sales and may stop it completely in May.
Source: Reuters (Writing by Fransiska Nangoy; Editing by Tom Hogue and Kenneth Maxwell)

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