As a result of the nation’s recovery from COVID-related travel restrictions, gasoline consumption and imports in Indonesia, Asia’s top importer of the motor fuel, could reach all-time highs this year. However, growth is projected to moderate along with Indonesia’s economy.
A rise in Indonesian imports would constrict the regional gasoline market and presumably increase refinery profit margins in Asia. It could also expedite plans to add methanol and ethanol to gasoline to reduce the country’s dependency on foreign supplies, a biofuel drive that would complement the country’s extensive adoption of biodiesel.
In 2023, Indonesia would consume 670,000 barrels per day (bpd) of gasoline, up from 635,000 bpd in 2022, according to the energy consultancy Rystad Energy.
According to Sofia Guidi Di Sante, a senior oil markets analyst at Rystad Energy, the post-COVID rebound is the primary driver of gasoline demand increase.
We have accounted for a slower rate of growth due to the plausible effects of a potential global recession.
Wood Mackenzie, a consulting firm, reported that Indonesia’s gasoline imports topped pre-pandemic levels in year at 380,000 bpd, a record high based on data from 2010. This might reach between 390,000 and 400,000 bpd this year, according to WoodMac.
Refinitiv Oil Research anticipated that imports will increase to approximately 15 million tonnes (345,000 bpd) in 2022, from approximately 11.5 million tonnes in 2021.
“With (Indonesia’s) healthy economic growth and mobility, demand is projected to remain robust,” said Ranice Tan, a research analyst at WoodMac.
“However, growth is anticipated to decelerate due to repeated gasoline price hikes over the past year (to curb subsidy inflation) and possibly recessionary consequences.”
At the beginning of September, the government of Indonesia increased subsidized fuel prices by almost 30% in an effort to rein in budgetary costs.
Still, government subsidies, which account for over half of the retail price of gasoline, have mitigated the impact of soaring energy prices on consumers, according to Tan.
In addition, the government has raised the quantity of subsidized fuel distributed this year.
In 2022, sales of subsidized gasoline reached 29.81 million kl (513,700 bpd), as estimated by Indonesia’s downstream oil and gas regulator BPH Migas, according to committee member Saleh Abdurrahman.
This year, BPH Migas will provide 32.56 million liters of subsidized gasoline, according to a statement released by the company.