IDB offers financing for fuel imports from Saudi Aramco

The Islamic Development Bank (IDB) has offered Indonesia a trade financing facility to import fuel from Saudi Aramco, Detik online news service reported, quoting energy minister Purnomo Yusgiantoro.

'If we buy from Aramco, IDB will make the payment and Indonesia can repay a year later at a lower cost,' Detik quoted Yusgiantoro, who is accompanying President Susilo Bambang Yudhoyono in a state visit to Jordan, as saying.

Yusgiantoro said Indonesia may use the trade financing facility to buy crude oil from Aramco and fuel products from Kuwait. IDB's offer is being studied, he said.

Meanwhile, he said that he has asked Aramco to ease its payment terms for the purchase of crude oil.

Last year Aramco and Kuwait Petroleum Corp temporarily suspended their oil and fuel deliveries to Indonesia due to concerns that they may not receive payments from state oil and gas firm PT Pertamina.

Pertamina, which is in charge of importing and distributing oil and gas products, had run into cashflow problems due to rising oil prices and late reimbursements by the government.

Indonesia's oil refineries in Cilacap, Central Java and Balikpapan in East Kalimantan can only process imported high grade oil, said Yusgiantoro.

Indonesia resorts to fuel imports as its refineries lack sufficient capacity to meet domestic fuel demand.(*)