Newcomers in Oil Upstream Sector
- The president displeased with the high level of oil and gas imports, causing the country’s substantial trade deficit. Statistics Indonesia recorded that during January-November 2019, it reached US$ 8.3 billion, even though it was an improvement compared to the number in the previous year at US$ 12.4 billion. Moreover, the new refineries initially planned to support the sector are not ready.
- The processed products from gasoline with the octane rating of 88 to 95 generally dominate the oil imports. The aspiration to be free of imported products in the short term is unrealistic since the domestic consumptions of such products are still high. The average annual consumption growth was up to 14.4 percent in the last five years. At the same time, the production capacity in the upstream sector and processing refineries is not adequate.
- Several private companies, either domestic or in collaboration with foreign companies, start flooding the downstream oil business. They operate in various lines of business, from distribution, sales, to storage sectors. Such sectors are up-and-coming, following the government’s plan to impose the one-price oil and gas program.
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